One-glance verdict
Undervalued
$148.48 our estimate vs market $83.67
Wall Street consensus: $108.38 (-27.0% lower than our fair-value estimate)
44% below our estimate, below the bear case
Fundamentals snapshot
Elastic N.V.
ESTC · NYQ · Technology · Software - Application
Current price
$83.67
52-week range
$42.05 - $108.00
Market cap
$8.78B
Balance sheet
Healthy
-1.33x Concerning
Net cash $865.27M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 3.6% last year.
- Reward Returns 33.1% on equity, ahead of 80% of its peers.
- Reward Free cash flow was positive in 6/10 years.
What this company does
Elastic N.V.
Elastic sells software that acts like a powerful search engine for a company's own internal data, helping them find information, monitor computer systems, and spot security threats. The company makes most of its money from cloud subscriptions, which creates recurring revenue (income that is likely to continue in the future, like a magazine subscription). This is important because almost every large business needs to quickly search and analyze massive amounts of data to run their websites and services effectively.
How the company got here
Elastic was founded in 2012 to commercialize an open-source search engine called Elasticsearch, which was created by its founder, Shay Banon. Initially, the software was popular with developers for its ability to search and analyze large amounts of data quickly. The company grew by creating a suite of tools around Elasticsearch for things like data visualization (Kibana) and data collection (Logstash and Beats). A major turning point was its initial public offering (IPO) in 2018, which provided more capital to expand its business. Over time, Elastic has evolved from just a search company into a platform that also offers security and observability (monitoring) solutions.
What it actually does
Elastic provides a software platform that helps organizations search, analyze, and visualize large amounts of data in real-time. Think of it like a powerful search bar and analytics tool for a company's internal data, which can include everything from website logs to sales figures and security alerts. This helps businesses quickly find information, monitor the performance of their applications, and protect against cyber threats. Many well-known companies like Netflix, Walmart, and Adobe use Elastic's tools to power their own search features or to keep their systems running smoothly.
Elastic Cloud
This is a subscription service where Elastic hosts and manages its software for customers on cloud platforms like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud. Instead of setting up and maintaining the software on their own servers, customers pay Elastic a recurring fee to handle all the technical details. This segment makes up the largest and fastest-growing part of the company's revenue. The pricing is often based on how much data the customer uses, so as their needs grow, they pay more.
Other Subscription
This segment includes revenue from customers who choose to run Elastic's software on their own computers and servers, which is known as a self-managed or on-premises deployment. These customers pay a subscription fee for a license to use the software and to receive technical support and access to advanced features. This is a significant part of Elastic's business, representing a little less than half of its revenue. This option is often chosen by companies with specific security or data-control requirements.
Professional Services
This is the smallest part of Elastic's business and includes fees for consulting and training services. When a company first starts using Elastic's platform or wants to build a complex system, they can hire Elastic's experts to help them design, implement, and optimize their setup. While this doesn't bring in as much money as subscriptions, it helps customers be more successful with the software, which can lead to them using it more over time.
What management is betting on now
Elastic's main focus is on expanding its Elastic Cloud business, encouraging more customers to use its managed service instead of running the software themselves. The company is also heavily investing in artificial intelligence (AI) features, such as vector search, to make its platform smarter and more capable of handling new types of data used in AI applications. Another key priority is to get customers who start with one of its products (like Search) to adopt its other solutions for Observability and Security, a strategy known as cross-selling. To support these goals, the company has been reorganizing its teams to focus more on AI and key growth areas.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q2
$37.66M
FY2025 Q3
$87.29M
FY2025 Q4
$84.86M
FY2026 Q1
$104.18M
FY2026 Q2
$26.01M
FY2026 Q3
$41.80M
FY2026 Q4
$149.81M
FY2027 Q1
$131.41M
Revenue
$478.11M
Net income
$-16.73M
Diluted EPS
-0.16
Operating cash flow
$132.00M
Free cash flow
$131.41M
Fetching…
Sources
Revenue
$450.68M
Net income
$435.90M
Diluted EPS
4.07
Operating cash flow
$152.71M
Free cash flow
$149.81M
Fetching…
Sources
Revenue
$449.88M
Net income
$7.75M
Diluted EPS
0.07
Operating cash flow
$42.74M
Free cash flow
$41.80M
Fetching…
Sources
Revenue
$423.48M
Net income
$-51.28M
Diluted EPS
-0.48
Operating cash flow
$26.61M
Free cash flow
$26.01M
Fetching…
Sources
Revenue
$415.29M
Net income
$-24.60M
Diluted EPS
-0.23
Operating cash flow
$104.83M
Free cash flow
$104.18M
Fetching…
Sources
Revenue
$388.43M
Net income
$-16.38M
Diluted EPS
-0.15
Operating cash flow
$86.98M
Free cash flow
$84.86M
Fetching…
Sources
Revenue
$382.08M
Net income
$-17.06M
Diluted EPS
-0.16
Operating cash flow
$88.06M
Free cash flow
$87.29M
Fetching…
Sources
Revenue
$365.36M
Net income
$-25.45M
Diluted EPS
-0.25
Operating cash flow
$38.38M
Free cash flow
$37.66M
Fetching…
Sources
Is it cheap or expensive?
Fair value $148.48 vs current price $83.67
Wall Street consensus is the average analyst price target: $108.38 (-27.0% lower than our fair-value estimate).
Our most-likely fair value is $148.48 a share — about 77.5% above today's price of $83.67, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $865.3M - more cash than debt. Interest coverage -1.3x.
Net debt
$-865.27M
Interest coverage
-1.33x
Elastic N.V.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
ESTC
BASELINE
Elastic N.V.
Total debt $595.77M Interest coverage -1.33x This is the baseline the peer rows are being compared against.
Total debt $159.27M Interest coverage 77.42x This peer still has a real interest-payment cushion, while ESTC does not.
Total debt $55.01M Interest coverage -43.79x Neither company has much profit cushion over interest right now.
Total debt $0.00 Interest coverage -1.54x Neither company has much profit cushion over interest right now.
Total debt $1.28B Interest coverage -4.01x Neither company has much profit cushion over interest right now.
What you should know
The case for and against ESTC
3 Rewards
0 Risks
Rewards
-
Revenue grew 3.6% last year.
-
Returns 33.1% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 6/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
23.91x
Forward P/E
21.16x
P/B
6.78x
P/S
4.87x
EV/EBITDA
-354.74x
PEG ratio
1.37x
Profitability
How much profit each dollar creates
Gross margin
75.6%
Operating margin
-0.6%
Net margin
20.8%
ROE
33.1%
ROA
-0.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.46x
Current ratio
1.81x
Quick ratio
1.64x
Total debt
$595.77M
Total cash
$1.46B
Growth
How the business has been compounding
Revenue TTM
$1.80B
Revenue 5Y CAGR
19.2%
EPS TTM
3.50
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$354.06M
Free CF TTM
$321.80M
FCF margin
17.9%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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