Elastic (ESTC) Stock Falls Sharply Despite Better-Than-Expected Earnings. Here's What Analysts are Saying

December 2, 2021 8:50 AM EST
Get Alerts ESTC Hot Sheet
Price: $82.13 -4.56%

Rating Summary:
    18 Buy, 3 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 25 | Down: 19 | New: 35
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Shares of Elastic N.V. (NYSE: ESTC) are down nearly 9% today despite the fact the company reported better-than-expected FQ2 results and guidance.

Elastic N.V. reported FQ2 EPS of ($0.09), $0.07 better than the analyst estimate of ($0.16). Revenue for the quarter came in at $206 million versus the consensus estimate of $194.57 million.

“Our strong second-quarter results were fueled by the rapid adoption of Elastic Cloud, the increased strategic relevance of our solutions, and continued expansion across our customer base,” said Shay Banon, Elastic founder and chief executive officer.

For this quarter, Elastic is calling for EPS between ($0.24)-($0.20), versus the consensus of ($0.22). Sales are expected between $207-209 million, versus the consensus of $202.59 million.

On a full-year basis, Elastic is calling for EPS between ($0.61)-($0.51), versus the consensus of ($0.60), and revenue between $826-832 million, versus the consensus of $813.74 million

Despite a move lower in Elastic shares in after hours, Rosenblatt analyst Blair Abernethy reiterated a Buy rating as he remains positive on the near-term growth prospects for Elastic.

“Elastic continues, in our view, to demonstrate good progress in moving upward and raising its profile in its enterprise customer base,” the analyst said in a client note.

Stifel analyst Brad Reback also maintained a Buy rating but lowered the price target to $185.00 per share from the prior $200.00.

“We continue to believe Elastic represents a compelling Cloud transition story given the increasing scale of its SaaS business that should sustain well above corporate revenue growth rates driven by its consumption based pricing model and self-service customer acquisition sales motion. This rapidly growing Cloud business, coupled with the company's ongoing expansion of its product portfolio beyond Search into Observability and Security, as well as improving operational efficiency and profitability, should generate continued multiple expansion in coming quarters,” the analyst wrote.

Elastic shares closed at $139.13 yesterday.



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