Elastic (NYSE:ESTC) Shares Gap Down Following Analyst Downgrade

Key Points

• Elastic shares gapped down after Wedbush cut its price target from $74 to $65, even though the firm kept an outperform rating. The stock opened below its prior close following the downgrade.
• Recent earnings were better than expected, with EPS of $0.61 on revenue of $450.7 million, both ahead of Wall Street estimates. The company also issued strong Q1 fiscal 2027 guidance above consensus.
• Analyst sentiment remains mixed but generally positive: several firms have trimmed targets, while Elastic still has an average Moderate Buy rating and a consensus target price of $82.89. Insider sales and some concern about slower forward revenue growth may also be weighing on the stock.

Shares of Elastic N.V. (NYSE:ESTC - Get Free Report) gapped down prior to trading on Friday after Wedbush lowered their price target on the stock from $74.00 to $65.00. The stock had previously closed at $57.61, but opened at $53.91. Wedbush currently has an outperform rating on the stock. Elastic shares last traded at $60.1310, with a volume of 918,223 shares changing hands.

Several other equities research analysts have also recently issued reports on the stock. The Goldman Sachs Group began coverage on shares of Elastic in a research report on Tuesday, April 21st. They set a "neutral" rating and a $50.00 price objective for the company. Rothschild & Co Redburn began coverage on Elastic in a research note on Thursday, April 23rd. They issued a "neutral" rating and a $49.00 price target on the stock. Piper Sandler cut their price target on Elastic from $110.00 to $85.00 and set an "overweight" rating on the stock in a research note on Friday, February 27th. William Blair began coverage on shares of Elastic in a research note on Friday, May 22nd. They issued an "outperform" rating for the company. Finally, JPMorgan Chase & Co. decreased their price objective on shares of Elastic from $99.00 to $80.00 and set an "overweight" rating for the company in a research note on Wednesday. Eighteen equities research analysts have rated the stock with a Buy rating, twelve have assigned a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat, Elastic currently has an average rating of "Moderate Buy" and an average target price of $82.89.

Insider Buying and Selling at Elastic

In other news, CRO Mark Eugene Dodds sold 3,723 shares of the stock in a transaction that occurred on Monday, March 9th. The shares were sold at an average price of $52.28, for a total value of $194,638.44. Following the sale, the executive directly owned 152,563 shares in the company, valued at $7,975,993.64. This represents a 2.38% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, CAO Jane E. Bone sold 887 shares of the stock in a transaction that occurred on Monday, March 9th. The shares were sold at an average price of $52.28, for a total transaction of $46,372.36. Following the completion of the sale, the chief accounting officer owned 42,284 shares in the company, valued at $2,210,607.52. This represents a 2.05% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders have sold 38,188 shares of company stock worth $1,996,469. Corporate insiders own 12.70% of the company's stock.

Elastic News Roundup

Here are the key news stories impacting Elastic this week:

• Positive Sentiment: Elastic beat quarterly expectations, posting EPS of $0.61 versus $0.56 expected and revenue of $450.7 million versus $446.7 million expected, with revenue up 16% year over year. Elastic Reports Fourth Quarter and Fiscal 2026 Financial Results
• Positive Sentiment: The company’s first-quarter fiscal 2027 guidance also topped consensus, with EPS guidance of $0.57 to $0.59 versus $0.50 expected and revenue guidance of $469 million to $470 million versus about $469.3 million expected. Elastic Reports Fourth Quarter and Fiscal 2026 Financial Results
• Positive Sentiment: Management highlighted strong cash generation and a larger contracted backlog, with operating cash flow of $152.7 million and remaining performance obligations of $2.0 billion, which supports the company’s growth story. Elastic shares fall 3.2% as investors digest Q4 results and fiscal 2027 outlook
• Neutral Sentiment: Analysts reacted with mixed but still generally constructive commentary: JPMorgan lowered its price target to $80 from $99, while Rosenblatt reiterated a Buy rating and several firms maintained targets above the current price. Elastic stock information
• Negative Sentiment: Some investors are likely selling because fiscal 2027 revenue guidance implies growth in the mid-teens, which may be viewed as a deceleration after a strong quarter and could leave less room for upside if expectations were high. Elastic shares fall 3.2% as investors digest Q4 results and fiscal 2027 outlook

Hedge Funds Weigh In On Elastic

A number of hedge funds have recently made changes to their positions in ESTC. Focus Partners Wealth acquired a new position in shares of Elastic in the 1st quarter valued at $494,000. Northwestern Mutual Wealth Management Co. increased its stake in Elastic by 17.3% during the 2nd quarter. Northwestern Mutual Wealth Management Co. now owns 1,159 shares of the company's stock worth $98,000 after buying an additional 171 shares during the period. Invesco Ltd. increased its stake in Elastic by 11.7% during the 2nd quarter. Invesco Ltd. now owns 95,332 shares of the company's stock worth $8,039,000 after buying an additional 9,990 shares during the period. EverSource Wealth Advisors LLC increased its stake in Elastic by 400.0% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 2,110 shares of the company's stock worth $178,000 after buying an additional 1,688 shares during the period. Finally, Cerity Partners LLC increased its position in shares of Elastic by 24.7% in the 2nd quarter. Cerity Partners LLC now owns 30,545 shares of the company's stock worth $2,576,000 after purchasing an additional 6,056 shares during the last quarter. Institutional investors and hedge funds own 97.03% of the company's stock.

Elastic Price Performance

The company's 50-day moving average price is $50.20 and its two-hundred day moving average price is $62.82. The company has a market cap of $6.21 billion, a P/E ratio of -75.65, a P/E/G ratio of 101.99 and a beta of 0.88. The company has a current ratio of 1.82, a quick ratio of 1.82 and a debt-to-equity ratio of 0.72.

Elastic (NYSE:ESTC - Get Free Report) last released its earnings results on Thursday, May 28th. The company reported $0.61 earnings per share for the quarter, topping the consensus estimate of $0.56 by $0.05. The company had revenue of $450.68 million during the quarter, compared to the consensus estimate of $446.66 million. Elastic had a negative net margin of 5.04% and a negative return on equity of 2.34%. The company's revenue was up 16.0% on a year-over-year basis. During the same quarter in the previous year, the firm earned $0.47 EPS. Elastic has set its FY 2027 guidance at 3.210-3.290 EPS and its Q1 2027 guidance at 0.570-0.590 EPS. As a group, sell-side analysts expect that Elastic N.V. will post 0.04 earnings per share for the current year.

Elastic Company Profile

Elastic N.V. operates as a search and analytics company, offering a suite of open source and subscription-based solutions for search, observability and security use cases. Its flagship product, Elasticsearch, enables fast and scalable full-text search and analytics across large volumes of structured and unstructured data. Complementary tools such as Kibana provide visualization capabilities, while Beats and Logstash serve as lightweight data shippers and data processing pipelines, respectively.

The company was founded in 2012 by Shay Banon, who serves as chief technology officer, and Steven Schuurman.

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