In a report released yesterday, Andrew Sherman from TD Cowen reiterated a Hold rating on Elastic (ESTC – Research Report), with a price target of $105.00.
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Andrew Sherman has given his Hold rating due to a combination of factors including the anticipated performance of Elastic’s cloud revenue and the broader market conditions. While Elastic has shown a solid increase in cloud revenue, with a growth of 23% expected, the forecast for fiscal year 2026 is slightly below market expectations, partly due to a new CFO and challenging macroeconomic conditions.
Additionally, despite improvements in partner surveys and an increase in sales headcount, there are concerns regarding competition, particularly from OpenSearch, and pricing frustrations. The U.S. public sector, a significant vertical for Elastic, has shown some non-renewals, and there are competitive pressures from companies like Datadog and Microsoft. These factors contribute to a cautious outlook, justifying the Hold rating.
In another report released on May 7, Bank of America Securities also maintained a Hold rating on the stock with a $104.00 price target.
Based on the recent corporate insider activity of 56 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ESTC in relation to earlier this year.