Needham analyst Mike Cikos has maintained their neutral stance on ESTC stock, giving a Hold rating on October 6.
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Mike Cikos has given his Hold rating due to a combination of factors that reflect both optimism and caution. The management of Elastic has projected a positive revenue outlook for the upcoming fiscal years, with expectations of over 20% growth and a strong Rule of 40% profile. This growth is anticipated to be driven by product innovation in the Observability and Security markets, alongside a generative AI tailwind expected over the next three years.
Despite these promising projections, Cikos remains cautious and maintains a Hold rating until the new initiatives begin to show tangible results. The company’s improved sales execution and productivity, along with a consistent net revenue retention rate, are positive indicators. However, the analyst seems to be waiting for more concrete evidence of these growth strategies taking effect before adjusting the rating.
In another report released on October 6, Scotiabank also downgraded the stock to a Hold with a $90.00 price target.
Based on the recent corporate insider activity of 55 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.