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SAN FRANCISCO - Elastic (NYSE:ESTC), a technology company with a market capitalization of $9.18 billion and impressive 17% year-over-year revenue growth, announced Tuesday that its Elastic Cloud Hosted service has reached Federal Risk and Authorization Management Program (FedRAMP) High "In Process" status on AWS GovCloud (US).
The designation represents a significant step toward enabling the company to support more sensitive U.S. federal government workloads. FedRAMP High is the program’s most stringent security baseline, requiring over 400 security controls to protect cloud environments managing sensitive unclassified information related to national security, critical infrastructure, and financial risk. According to InvestingPro data, Elastic maintains strong financial health with more cash than debt on its balance sheet and a healthy current ratio of 1.92, positioning it well for government contract expansion.
Elastic Cloud Hosted already holds FedRAMP Moderate authorization on AWS GovCloud (US), which allows it to serve various public sector agencies.
"Achieving FedRAMP High ’In Process’ status is a significant step toward expanding our support for federal agencies with high-security workloads," said Chris Townsend, global vice president of Public Sector at Elastic, in a press release statement.
The company is now working with its sponsoring agency and third-party assessors to complete the final phases of the authorization process. Upon receiving final authorization, Elastic Cloud Hosted will be cleared to support the government’s most security-sensitive workloads in compliance with FedRAMP High standards.
Elastic, which describes itself as "the Search AI Company," provides solutions for search, observability, and security built on its Elastic Search AI Platform. The platform is used by thousands of companies, including more than half of the Fortune 500, according to the company. With a robust gross profit margin of 74.5%, Elastic demonstrates strong operational efficiency. InvestingPro analysis reveals 6 additional key insights about Elastic’s performance and potential. Get access to the complete Pro Research Report, part of InvestingPro’s coverage of 1,400+ top US stocks, for comprehensive analysis and actionable investment intelligence.
In other recent news, Elastic NV’s fiscal fourth-quarter results were mixed, with revenue growth surpassing expectations, yet the company issued a revenue forecast that fell short of consensus. This conservative guidance has led to a range of analyst reactions. Monness, Crespi, Hardt upgraded Elastic’s stock rating to "buy," citing its compelling valuation and potential benefits from the generative AI movement. Meanwhile, Canaccord Genuity lowered its price target for Elastic to $110, maintaining a "buy" rating, and expressing confidence in the company’s ability to exceed its guidance.
Citi also adjusted its price target from $160 to $125, maintaining a "buy" rating despite a weaker performance in the federal sector. DA Davidson maintained a "neutral" rating with a $75 price target, reflecting a cautious outlook on the company’s growth. Similarly, TD Cowen lowered its price target to $90, citing a shortfall in cloud revenue and expressing caution about Elastic’s near-term prospects.
These developments reflect a diverse range of analyst opinions and highlight the company’s strategic focus on expanding its enterprise customer base and leveraging generative AI technology. While some analysts remain optimistic about Elastic’s potential, others express caution due to recent financial disclosures and market expectations.
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