Street Calls of the Week
Investing.com - Stifel maintained its Buy rating and $134.00 price target on Elastic NV. (NYSE:ESTC) following the company’s financial analyst day and user conference in New York City on Thursday. The target represents significant upside potential, with analyst targets ranging from $90 to $150, according to InvestingPro data.
Stifel highlighted Elastic’s expanding growth opportunities within its core product set and how its unstructured data platform and enterprise search position could benefit from broader enterprise-level generative AI adoption in coming quarters and years. The company’s strong position is supported by a healthy 75% gross profit margin and 17% revenue growth over the last twelve months.
The firm noted management discussed increasing sales productivity and efficiency resulting from recent go-to-market strategic changes, which contributed to a medium-term "Rule of 40+" framework evenly split between growth and free cash flow margin.
Elastic provided a modest guidance raise during the event and announced plans to repurchase $250 million of stock over the remainder of fiscal year 2026, part of a newly announced $500 million repurchase authorization.
Stifel expressed confidence that Elastic’s improving go-to-market execution, stable consumption trends, large and growing generative AI opportunity, and conservative guidance position the company for more consistent outperformance in coming quarters. According to InvestingPro, the stock is currently trading near its Fair Value, with analysts expecting profitability this year despite recent earnings estimate revisions.
In other recent news, Elastic NV announced a $500 million share repurchase program, which has no set expiration date. This decision allows the company to buy back its outstanding ordinary shares based on various factors, including share price and business conditions. Elastic also introduced a new GPU-accelerated inference service, enhancing its technological offerings. Meanwhile, TD Cowen maintained a Hold rating on Elastic, citing concerns about AI growth, but noted the company’s promising medium-term framework aiming for over 20% growth. William Blair reiterated its Outperform rating, highlighting Elastic’s strong position in the AI and search sectors and its potential to expand market share in observability and security. Cantor Fitzgerald raised its price target for Elastic to $94, expressing increased optimism following the company’s recent analyst day. Conversely, Goldman Sachs lowered its price target to $100, maintaining a Neutral rating while acknowledging Elastic’s mid-term growth framework. These developments reflect a mix of cautious optimism and strategic adjustments among analysts regarding Elastic’s future performance.
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