Shares of search-powered solutions provider Elastic N.V. (NYSE:ESTC) surged nearly 19% in the early session today after its second-quarter results and financial outlook impressed investors.
Driven by rising customer activity in generative AI and large language models, the company’s revenue jumped by 17.6% year-over-year to $311 million, exceeding estimates by about $7 million. EPS of $0.37 also outpaced expectations by $0.13. Further, Elastic Cloud revenue increased by 31% year-over-year to $135 million.
Elastic’s total subscription customer count rose by 1,000 to 20,700 compared to the year-ago quarter. Additionally, its total customer count with an annual contract value (ACV) of over $100,000 increased by 170 to 1,220.
Looking ahead to Fiscal Year 2024, the company expects revenue to be in the range of $1.247 billion to $1.253 billion. EPS for the year is anticipated to land between $1.06 and $1.15. For the upcoming quarter, Elastic expects to generate an EPS of $0.30 to $0.32 on a revenue range of $319 million to $321 million.
Is ESTC a Good Stock to Buy?
Overall, the Street has a Moderate Buy consensus rating on Elastic, and the average ESTC price target of $89.25 implies a modest 11% potential upside. That’s after a nearly 31% price gain in the company’s shares over the past year.
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