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Elastic
(NYSE:ESTC)
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Rating:79Outperform
Price Target:
$111.00
▲(40.06% Upside)
Action:Reiterated
Date:10/16/26
The score is driven primarily by improving financial fundamentals (profitability, stronger balance sheet, and better cash generation) and a constructive earnings update featuring raised guidance and strong backlog/contract metrics. Technicals are supportive with a clear uptrend and neutral momentum. The main constraint is valuation (P/E ~25.5) and the lack of dividend yield, alongside remaining questions around operating-line durability (EBIT still slightly negative recently).
Positive Factors
Recurring Subscription Model
Elastic’s subscription-led model creates recurring customer revenue across cloud and self-managed deployments. Usage-based cloud pricing can expand as data volumes and workload intensity rise, while enterprise support and proprietary features deepen retention and provide multiple avenues for durable account growth.
Negative Factors
Mixed Operating Profitability
Recent net profitability and positive EBITDA have not yet translated into consistently positive EBIT, leaving uncertainty about the durability of the core operating cost structure. Sustained improvement at the operating line remains important for demonstrating that earnings quality is not dependent on adjustments or below-the-line benefits.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring Subscription Model
Elastic’s subscription-led model creates recurring customer revenue across cloud and self-managed deployments. Usage-based cloud pricing can expand as data volumes and workload intensity rise, while enterprise support and proprietary features deepen retention and provide multiple avenues for durable account growth.
Read all positive factors
Elastic Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across regions, revealing where Elastic is strongest and where growth or currency risks are concentrated; helps judge dependence on the U.S. versus international markets and the success of local cloud adoption and sales efforts.
Breaks down revenue across regions, revealing where Elastic is strongest and where growth or currency risks are concentrated; helps judge dependence on the U.S. versus international markets and the success of local cloud adoption and sales efforts.
Data provided by:
The Fly
The FlyElastic (ESTC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.47B
Dividend YieldN/A
Average Volume (3M)1.91M
Price to Earnings (P/E)27.3
Beta (1Y)1.59
Revenue Growth16.18%
EPS GrowthN/A
CountryUS
Employees4,019
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)3.61
Shares Outstanding105,980,170
10 Day Avg. Volume1,896,724
30 Day Avg. Volume1,912,805
Financial Highlights & Ratios
PEG Ratio-0.03
Price to Book (P/B)3.83
Price to Sales (P/S)2.81
P/FCF Ratio15.20
Enterprise Value/Market Cap0.57
Enterprise Value/Revenue3.34
Enterprise Value/Gross Profit4.42
Enterprise Value/Ebitda93.34
Forecast
1Y Price Target
$111.64Price Target Upside40.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering27
EPS Forecast (FY)3.36
Revenue Forecast (FY)$2.01B
Elastic Business Overview & Revenue Model
Company Description
Elastic N.V., a company specializing in search technologies, furnishes advanced solutions engineered to operate across public, private, and multi-cloud environments. Its flagship offering is the Elastic Stack, a comprehensive software suite design...
How the Company Makes Money
Elastic primarily makes money by selling subscriptions to its Elastic Stack capabilities, with revenue largely driven by recurring customer spend. The company’s key revenue streams include: (1) Elastic Cloud: a managed cloud service where customer...
Elastic Earnings Call Summary
Earnings Call Date:Aug 27, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Dec 02, 2026
Earnings Call Sentiment Positive
The call presented broad-based positive momentum: accelerated revenue growth, strong contract backlog (CRPO/RPO), expanding high-value customer cohort, rising AI adoption among large customers, product innovations (vector search, columnar mode, PromQL support) and strategic wins including public-sector migrations and acquisitions. Management raised full-year guidance and expects continued margin expansion and positive GAAP operating results. Headwinds are modest and largely one-time (restructuring charges) or expected lags (trailing NER, cloud consumption variability).Positive Updates
Revenue Growth and Margin Expansion
Q1 total revenue of $478M, up 15% year-over-year (constant currency). Sales-led subscription revenue of $399M, up 18% reported (17% constant currency). Delivered non-GAAP operating margin of 16.2%, subscription gross margin of 81% and total gross margin of 77%.
Negative Updates
Restructuring and One-Time Charges
Management disclosed restructuring-related charges of approximately $20M incurred in Q1, with $13M of cash paid for restructuring and other charges during the quarter. They expect an additional $2M–$5M of restructuring charges for the remainder of the fiscal year.
Read all updates
Q1-2027 Updates
Positive
Negative
Revenue Growth and Margin Expansion
Q1 total revenue of $478M, up 15% year-over-year (constant currency). Sales-led subscription revenue of $399M, up 18% reported (17% constant currency). Delivered non-GAAP operating margin of 16.2%, subscription gross margin of 81% and total gross margin of 77%.
Read all positive updates
Company Guidance
Elastic raised its outlook and gave specific Q2 and full‑year FY27 guidance: for Q2 it expects total revenue of $486–$487M (≈15% CC growth at midpoint), sales‑led subscription revenue of $407.5–$408.5M (≈17% CC), non‑GAAP operating margin ≈19% and non‑GAAP diluted EPS $0.80–$0.82 on 108–109M diluted shares; for fiscal 2027 it now expects total revenue of $1.998–$2.010B (≈15.3% CC at midpoint), sales‑led subscription revenue $1.682–$1.694B (≈17.5% CC), non‑GAAP operating margin ≈19.4%, non‑GAAP diluted EPS $3.29–$3.37 on 108.5–109.5M shares and an adjusted free cash flow margin of 21.5%, while management expects GAAP operating profitability in Q2 and for the full year and to see revenue acceleration in H2 with Q4 highest; these raises were supported by Q1 results (revenue $478M, +15%; sales‑led subscription $399M, +18%/+17% CC; non‑GAAP op margin 16.2%; CRPO $1.2B, +21%/+20% CC; RPO $1.9B, +27%; subscription gross margin 81%; total gross margin 77%; Q1 adjusted FCF margin 30%), and the company noted Q1 restructuring charges of about $20M with $2–$5M more expected.Elastic Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
84
Very Positive
Cash Flow
78
Positive
| Breakdown | TTM | Apr 2026 | Apr 2025 | Apr 2024 | Apr 2023 | Apr 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.80B | 1.74B | 1.48B | 1.27B | 1.07B | 862.37M |
| Gross Profit | 1.36B | 1.32B | 1.10B | 937.24M | 772.36M | 630.18M |
| EBITDA | 64.46M | 34.67M | 6.05M | -78.63M | -171.49M | -157.34M |
| Net Income | 375.64M | 367.77M | -108.11M | 61.72M | -236.16M | -203.85M |
Balance Sheet | ||||||
| Total Assets | 3.00B | 3.15B | 2.59B | 2.24B | 1.74B | 1.64B |
| Cash, Cash Equivalents and Short-Term Investments | 1.46B | 1.37B | 1.40B | 1.08B | 915.21M | 860.95M |
| Total Debt | 595.77M | 591.56M | 595.01M | 593.70M | 594.23M | 594.22M |
| Total Liabilities | 1.71B | 1.88B | 1.67B | 1.50B | 1.34B | 1.23B |
| Stockholders Equity | 1.30B | 1.28B | 927.23M | 738.18M | 398.90M | 415.43M |
Cash Flow | ||||||
| Free Cash Flow | 349.04M | 321.80M | 261.82M | 145.31M | 32.98M | -1.75M |
| Operating Cash Flow | 354.06M | 326.89M | 266.17M | 148.76M | 35.66M | 5.67M |
| Investing Cash Flow | 214.59M | 26.07M | -118.67M | -287.96M | -272.95M | -127.27M |
| Financing Cash Flow | -349.31M | -312.27M | 40.95M | 40.05M | 17.47M | 602.13M |
Elastic Technical Analysis
Positive
79.25
Price Trends
89.70
Positive
76.07
Positive
66.31
Positive
Market Momentum
2.32
Positive
60.43
Neutral
56.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESTC, the sentiment is Positive. The current price of 79.25 is below the 20-day moving average (MA) of 93.51, below the 50-day MA of 89.70, and above the 200-day MA of 66.31, indicating a bullish trend. The MACD of 2.32 indicates Positive momentum. The RSI at 60.43 is Neutral, neither overbought nor oversold. The STOCH value of 56.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESTC.
Elastic Risk Analysis
Elastic disclosed 72 risk factors in its most recent earnings report. Elastic reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Elastic Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $6.89B | 16.59 | 11.28% | 0.92% | 8.08% | -18.39% | |
79 Outperform | $10.47B | 27.34 | 35.31% | ― | 16.18% | ― | |
78 Outperform | $1.33B | 8.36 | 70.79% | ― | 2.30% | ― | |
76 Outperform | $18.39B | 127.39 | 5.72% | 4.32% | 17.94% | -69.28% | |
75 Outperform | $9.16B | -175.81 | -5.51% | ― | 22.99% | -1190.91% | |
66 Neutral | $3.52B | -43.96 | -8.46% | ― | 20.35% | 48.42% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
ESTC
Elastic
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11.06
12.69%
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Elastic Corporate Events
Business Operations and StrategyExecutive/Board ChangesStock BuybackShareholder Meetings
Elastic shareholders reinforce governance and capital flexibility
Positive
Oct 15, 2026
On October 15, 2026, Elastic N.V. held its annual general meeting of shareholders in Amsterdam, where investors voted on eleven governance and corporate actions for Fiscal Year 2026 and beyond. Shareholders approved the appointment of non-executiv...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Elastic adds AI-focused Microsoft veteran to board
Positive
Aug 27, 2026
Elastic N.V. (NYSE: ESTC) is an infrastructure technology company that integrates search technology with artificial intelligence to power its Elasticsearch Platform, which underpins its search, observability and security solutions. Its products ar...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.