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Investing.com - TD Cowen reduced its price target on Elastic NV (NYSE:ESTC) to $100 from $105 on Tuesday, while maintaining its Hold rating on the enterprise search company’s stock. According to InvestingPro data, analyst targets for ESTC range from $90 to $150, with the consensus recommendation leaning toward Buy at 1.8 (on a scale where 1 is Strong Buy).
The firm cited mixed checks and competitive risks, particularly in security, as factors behind the lowered target ahead of Elastic’s upcoming earnings report on November 20, just two days away.
TD Cowen expects Elastic to deliver a modest beat and raise compared to the guidance provided at the company’s analyst day, but noted that the stock’s recent outperformance has created a higher bar for the company. This aligns with an InvestingPro tip indicating that net income is expected to grow this year, despite the company not being profitable over the last twelve months.
The firm specifically highlighted the need to see a strong cloud performance, which was boosted by pricing in the previous quarter, along with stronger RPO (remaining performance obligations) and bookings. The company has maintained solid revenue growth of 17.42% over the last twelve months.
At approximately 4.6 times EV/Sales, TD Cowen views Elastic’s current valuation as representing a balanced setup, with the second fiscal quarter typically being a seasonally strong period for the company’s cloud business. The $9.29 billion market cap company is trading at a high Price/Book multiple of 9.57, though InvestingPro’s Fair Value assessment suggests the stock is currently slightly undervalued. Discover more insights and 7 additional ProTips in the comprehensive Pro Research Report available for Elastic and 1,400+ other US equities.
In other recent news, Elastic announced its second-quarter earnings are expected to surpass consensus expectations, with Guggenheim reiterating a Buy rating and setting a $122.00 price target. Guggenheim anticipates that Elastic will not only exceed revenue expectations but also provide guidance for the third quarter that surpasses market expectations. Additionally, S&P Global Ratings has revised Elastic’s outlook to positive from stable, citing strong earnings and a projected reduction in leverage by the end of fiscal year 2026.
Elastic has also introduced new capabilities in its Elastic Distribution of OpenTelemetry (EDOT) SDK, enabling centralized management across distributed systems. In another development, Elastic has integrated with Microsoft’s Azure AI Foundry to enhance AI observability, providing real-time insights into AI workloads. Moreover, the company unveiled DiskBBQ, a new disk-friendly vector search algorithm in Elasticsearch, which promises more efficient vector search at scale. These recent developments highlight Elastic’s ongoing efforts to innovate and expand its technological offerings.
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