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Elastic
(NYSE:ESTC)
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Rating:79Outperform
Price Target:
$114.00
▲(43.85% Upside)
Action:Reiterated
Date:08/29/26
Overall score is driven primarily by improving fundamentals (profitability and free cash flow trajectory alongside a strengthened balance sheet) and strong technical momentum (price well above key moving averages with positive MACD). Raised FY27 guidance and upbeat backlog/sentiment further support the outlook, while the score is tempered by premium valuation (P/E ~27.6), lingering operating-line mixed signals, and noted variability/one-time charges (restructuring and cloud consumption variability).
Positive Factors
Recurring subscription growth and backlog strength
Recurring subscriptions and expanding contracted backlog provide revenue visibility. Strong CRPO and RPO growth supports future renewals and expansion, reducing reliance on one-time services and reinforcing Elastic’s durable enterprise software model.
Negative Factors
Growth is decelerating and expansion has softened
Moderating growth and a lower net expansion rate indicate that existing customers are expanding at a slower pace. Although management expects improvement, sustained deceleration could limit subscription compounding and pressure future operating leverage.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring subscription growth and backlog strength
Recurring subscriptions and expanding contracted backlog provide revenue visibility. Strong CRPO and RPO growth supports future renewals and expansion, reducing reliance on one-time services and reinforcing Elastic’s durable enterprise software model.
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
$10.39B
Dividend YieldN/A
Average Volume (3M)1.77M
Price to Earnings (P/E)27.6
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 Outstanding103,951,630
10 Day Avg. Volume1,615,699
30 Day Avg. Volume1,768,687
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$109.91Price Target Upside38.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering26
EPS Forecast (FY)3.24
Revenue Forecast (FY)$2.00B
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 generates the vast majority of its revenue from subscriptions. Its core revenue streams are (1) Elastic Cloud: a managed, hosted offering of Elastic’s products delivered as a cloud service (including deployments on major public clouds), wh...
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 | 59.83M | 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 | 24.58M | 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 Risk Analysis
Elastic disclosed 71 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $6.10B | 14.94 | 11.28% | ― | 8.08% | -18.39% | |
79 Outperform | $10.39B | 27.64 | 35.31% | ― | 16.18% | ― | |
78 Outperform | $1.09B | 6.78 | 76.52% | ― | 2.30% | ― | |
76 Outperform | $15.51B | 105.55 | 5.72% | ― | 17.94% | -69.28% | |
69 Neutral | $3.67B | -43.47 | -8.46% | ― | 20.35% | 48.42% | |
69 Neutral | $7.58B | -297.35 | -2.66% | ― | 24.90% | -233.01% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
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Elastic Corporate Events
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...
Business Operations and StrategyExecutive/Board Changes
Elastic Announces Workforce Restructuring to Realign AI Strategy
Negative
Jun 24, 2026
On June 23, 2026, Elastic N.V. approved a restructuring plan to realign investments with strategic priorities for the age of AI automation, targeting simpler team structures, faster decision-making, and a greater focus on key growth areas. The pla...
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.