On Tuesday, Baird made an adjustment to the price target for Elastic NV (NYSE:ESTC), reducing it slightly to $135 from the previous target of $137, while still maintaining an Outperform rating on the stock. Elastic NV is receiving continued support from Baird in the face of general market skepticism. This optimism is rooted in positive feedback from the company's channels and partners, as well as a recovery from previously declining cloud consumption trends.
The firm notes the consolidation in the market is contributing to a strong pipeline for Security Information and Event Management (SIEM) and Generative AI (GenAI), which is expected to drive growth. Despite recent increases in cloud growth expectations, which now align more closely with Baird's initial estimates of approximately 29% growth, Baird believes there is potential for further upside. This is particularly relevant as FY25 expectations from the buy-side appear to be lower, as indicated by current valuations which are seen as compressed or at a trough.
Baird anticipates Elastic NV will provide cautious initial guidance for FY25, but expects the high end of this guidance to be within the range of consensus estimates. The firm's confidence in the achievability of the current FY25 consensus is bolstered by a strong second-half pipeline in SIEM and Analytics.
As part of their ongoing engagement with investors, Baird will host investor meetings with Elastic NV at the GCTS Conference in New York City on June 5, 2024. This event will offer an opportunity for investors to gain further insights into the company's performance and outlook.
InvestingPro Insights
Elastic NV (NYSE:ESTC) continues to be a topic of interest for investors, with Baird's recent price target adjustment and the upcoming investor meetings at the GCTS Conference. To provide additional context, here are some insights based on real-time data and InvestingPro Tips:
InvestingPro Data shows Elastic NV with a Market Cap of $10.58B and a high P/E Ratio of 184.45, suggesting that the stock is trading at a high earnings multiple relative to its current earnings. Despite this, the company's revenue growth remains robust, with a 17.88% increase over the last twelve months as of Q3 2024, and even higher quarterly growth at 19.45%. The gross profit margin stands at a healthy 74.01%, although the company is currently operating at a loss with an Operating Income Margin of -9.81%.
From the InvestingPro Tips, it's worth noting that Elastic NV is predicted by analysts to be profitable this year, and it has seen a significant return over the last year with a 51.88% price total return. These factors, combined with the company's liquid assets exceeding short-term obligations and a moderate level of debt, provide a nuanced picture for potential investors.
For those looking to delve deeper into the financial health and future prospects of Elastic NV, InvestingPro offers additional insights. There are 10 more InvestingPro Tips available, including analysis on the company's valuation multiples and profitability metrics. Interested readers can access these tips by visiting https://www.investing.com/pro/ESTC and can take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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