Elastic N.V (ESTC) Stock Forecast & Price Target

Elastic has demonstrated strong financial performance, with Q1 total revenue growing 20% year-over-year to $415.3 million, surpassing both internal estimates and market consensus. The company’s Subscription Revenue also rose 20% year-over-year to $388.6 million, indicating robust demand across its offerings despite a recent price increase. Additionally, Elastic's Cloud Revenue reached $195.8 million, accounting for 47% of total revenue and reflecting a 24% year-over-year increase, further underscoring positive momentum in both their cloud and self-managed business segments.

Elastic's recent financial reports indicate a concerning decline in key performance metrics, with Total New ARR decreasing by 22% year-over-year, compared to a prior target of 10% growth for FY25. The company's competitive position in the GenAI search, observability, and security information and event management (SIEM) markets is under pressure, compounded by extended go-to-market challenges that may hinder revenue growth and profit margins. Additionally, the guidance for revenue and non-GAAP EBIT margins for FY26 remains subdued, reflecting both conservative projections amid ongoing macroeconomic challenges and a significant drop in Cloud New ARR by 60%.