Needham & Company Starts Elastic NV. (ESTC) at Hold, 'headwind to share price appreciation'

Needham & Company analyst Mike Cikos initiates coverage on Elastic NV. (NYSE: ESTC) with a Hold rating.

The analyst comments "We initiate coverage of Elastic with a Hold rating, as we view the consensus assumption for Elastic Cloud revenue growth (especially in 2HFY25) as too aggressive. Given that Elastic Cloud is the company's primary growth engine, a reduction in the business' expected growth will reduce the stock's valuation multiple, in our view, and serve as a headwind to share price appreciation. Since Revenue is the best indicator of Consumption (billings and RPO are poor indicators, as 15% of Elastic Cloud revenue comes from month-to-month arrangements), we monitor Elastic Cloud's sequential revenue growth on a days-adjusted basis to determine underlying momentum in a 'real-time' fashion."

For an analyst ratings summary and ratings history on Elastic NV. click here. For more ratings news on Elastic NV. click here.

Shares of Elastic NV. closed at $82.00 yesterday.

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