Analyst Andrew Sherman of TD Cowen reiterated a Hold rating on Elastic (ESTC – Research Report), boosting the price target to $125.00.
Andrew Sherman has given his Hold rating due to a combination of factors surrounding Elastic’s recent performance and future outlook. The company has shown strong cloud revenue growth, surpassing expectations, which is a positive sign. However, there are concerns about the sustainability of this growth, as management has noted the unpredictability of quarterly usage and has not assumed this trend will continue.
Additionally, while there have been some encouraging developments, such as the lack of disruption from go-to-market changes, other metrics present a mixed picture. New customer growth remains weak, and sales and marketing growth has been low, raising questions about the need for increased sales capacity. Furthermore, the transition to a new CFO introduces some uncertainty regarding future guidance, and current valuations appear relatively high. These factors collectively contribute to the Hold rating.
Based on the recent corporate insider activity of 57 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ESTC in relation to earlier this year.