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On Monday, Stifel analysts maintained a positive stance on Elastic NV (NYSE:ESTC), reiterating a Buy rating with a $140.00 price target, well above the current trading price of $76.14. The stock has garnered strong analyst attention, with consensus targets ranging from $93 to $160, and notably, 22 analysts have recently revised their earnings expectations upward. Following a conversation with the company’s management last week, the analysts gained insights into various aspects of the business, including federal exposure and the recent change in the Chief Financial Officer (CFO) position. They also discussed guidance assumptions and provided further details on the go-to-market (GTM) strategy changes planned for fiscal year 2025.
The Stifel team is encouraged by Elastic’s improved GTM execution and stronger recent consumption trends, supported by the company’s impressive 17.95% revenue growth and healthy 74.27% gross profit margin. They also noted the potential presented by the growing Generative AI (GenAI) market and the company’s ongoing operational efficiency efforts. Despite these positive factors, the analysts expressed caution due to uncertainties related to federal spending and potential economic effects on consumption trends and close rates. InvestingPro analysis reveals the company maintains strong liquidity with a current ratio of 2.02, suggesting robust operational stability. The recent CFO transition and management’s focus on delivering consistent performance relative to guidance were also highlighted as areas of attention.
Looking ahead, the analysts anticipate Elastic’s management to present a cautious initial guide for fiscal year 2026 when they report fourth-quarter 2025 earnings, scheduled for May 29, 2025. The stock has experienced significant pressure recently, with a -14.55% return over the past week, and technical indicators from InvestingPro suggest the stock is currently in oversold territory. The commentary from Stifel suggests they believe management will take a conservative approach in their forward-looking statements, considering the various challenges and uncertainties currently facing the company.
The analysts’ note underscores the balance between the positive developments at Elastic, such as GTM improvements and the GenAI opportunity, against the backdrop of macroeconomic and internal company factors that could influence future performance. The reiteration of the Buy rating and $140.00 price target reflects Stifel’s continued confidence in Elastic’s stock potential, despite the need for prudence in the near term. According to InvestingPro analysis, Elastic appears undervalued at current levels, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of this and 1,400+ other US stocks.
In other recent news, Elastic’s third-quarter fiscal year 2025 results have exceeded expectations, prompting several analyst firms to adjust their price targets and ratings for the company. UBS raised its price target to $148 from $140, highlighting Elastic’s strong 26% constant currency growth in Cloud revenue and a significant increase in remaining performance obligations. Truist Securities also increased its target from $135 to $145, noting the company’s improved execution and strategic focus on GenAI opportunities. Stifel, while maintaining a Buy rating, revised its target to $38, emphasizing Elastic’s robust revenue performance and effective sales execution.
DA Davidson held a Neutral stance with a $115 target, acknowledging the company’s solid quarterly performance and operational efficiency. Elastic’s management has raised its fiscal year outlook, reflecting confidence in future growth, particularly in GenAI initiatives. The company also announced a partnership with Tines to enhance its security and observability workflow automation, aiming to improve efficiency for security teams. This collaboration is expected to provide significant advantages in addressing security challenges and reducing operational costs.
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