Street Calls of the Week
SAN FRANCISCO - Elastic (NYSE:ESTC), a $9.1 billion market cap company with a robust 75% gross margin, announced Tuesday the launch of Agent Builder, a new set of capabilities that allows developers to build custom AI agents using their company data within minutes.
The new toolset, powered by Elasticsearch, provides a native conversational experience for exploring and analyzing data stored in Elasticsearch. According to the company, Agent Builder aims to simplify the process of context engineering - delivering relevant information to AI agents from scattered unstructured data sources. InvestingPro analysis shows Elastic maintaining strong financial health with 17.4% year-over-year revenue growth.
Agent Builder enables developers to immediately chat with company data through a built-in conversational agent, utilize intelligent tools for relevance, build custom tools using Elasticsearch’s query language, define custom agents with controlled security profiles, and integrate with Model Context Protocol (MCP) and A2A.
"AI agents don’t just need lots of data, they need the right data and tools, with relevance, guardrails, and observability built in," said Ken Exner, chief product officer at Elastic, in the press release.
The new offering is currently available in Technical Preview on Elastic Cloud in serverless mode, with a planned release in version 9.2.
Elastic, which describes itself as the Search AI Company, serves thousands of organizations including more than 50% of Fortune 500 companies, according to the press release statement. Trading at $85.61, with the next earnings report due November 26, the stock is currently fairly valued according to InvestingPro’s Fair Value model, which offers additional insights through its comprehensive Pro Research Report.
In other recent news, Elastic NV has been the focus of multiple analyst assessments following its financial analyst day and user conference in New York City. Stifel reiterated its Buy rating on Elastic, emphasizing the company’s growth potential in generative AI and maintaining a price target of $134. TD Cowen, on the other hand, kept a Hold rating with a $105 price target, acknowledging Elastic’s promising medium-term framework but expressing concerns over AI growth. William Blair continues to rate Elastic as Outperform, noting its strong positioning in the AI and search markets, which are its fastest-growing sectors. Cantor Fitzgerald raised its price target slightly to $94, maintaining a Neutral rating but expressing increased positivity after the event. Meanwhile, Goldman Sachs lowered its price target to $100, citing Elastic’s mid-term growth outlook and a focus on a "Rule of 40+" performance metric. These developments highlight varied analyst perspectives on Elastic’s future growth and market positioning.
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