On Monday, Rosenblatt Securities reiterated its Buy rating on Elastic NV (NYSE: NYSE:ESTC), with a steady price target of $136.00. The firm anticipates Elastic to announce its first-quarter results for fiscal year 2025 on Thursday, August 29, 2024, after the market closes.
The upcoming report is expected to align with the analyst's projections, despite Elastic's recent challenges in enterprise sales cycles, budget reviews on digital transformation spending, and softness in the small and medium-sized business (SMB) segment.
Elastic has been navigating through extended enterprise selling periods and increased scrutiny of digital transformation budgets. Additionally, the SMB customer base, which last quarter contributed approximately 32% to Elastic Cloud revenue on a month-to-month basis, has shown signs of weakness.
Despite these hurdles, the company's focus on tool consolidation, as well as IT cost and operational efficiency, remains a priority, which was noted in the last quarter's observations.
Rosenblatt's analysis indicates that for the first quarter of fiscal year 2025, Elastic Cloud is projected to grow by 28%, a slight decrease from the 32% growth seen in the fourth quarter of the previous fiscal year.
The firm's expectations are based on the belief that Elastic will continue to face the same market conditions it has in the recent past, without any adjustments to their forecasts.
The analyst's commentary highlighted that Elastic has not observed a significant shift in customer optimization efforts recently. However, the importance of tool consolidation and the need for improved IT cost and operational efficiency are still key factors for the company.
In summary, Rosenblatt Securities is holding firm on its price target and Buy rating for Elastic NV, indicating confidence in the company's performance and market position despite the noted challenges. The market awaits the official earnings release later this week to see if Elastic's results will meet the analyst's expectations.
In other recent news, Elastic NV has been the center of attention with several noteworthy developments. The company has seen a series of analyst upgrades following a robust fourth-quarter performance. Oppenheimer raised Elastic's target price to $150, reflecting a 17.1% year-over-year increase in revenue expectations for the first quarter of fiscal year 2025.
TD Cowen maintained its Hold rating on Elastic NV stock, expecting a 29% rise in Cloud growth. Meanwhile, Citi raised the company's price target to $155, highlighting the company's accelerated top-line growth.
Elastic NV has also launched Elastic Distributions of OpenTelemetry (EDOT), a suite of tools designed to enhance infrastructure and application monitoring. The EDOT portfolio integrates with standard OpenTelemetry distributions, providing users with advanced insights for troubleshooting.
Lastly, a review of Elastic's proxy statement revealed a reduction in the Cloud component of executive bonuses, decreasing from 50% to 30%. This change suggests a possible shift in the company's incentive structure. These are recent developments that investors may find valuable.
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