One-glance verdict
Undervalued
$133.81 our estimate vs market $60.20
Wall Street consensus: $74.52 (-44.3% lower than our fair-value estimate)
55% below our estimate, below the bear case
Fundamentals snapshot
Elastic N.V.
ESTC · NYQ · Technology · Software - Application
Current price
$60.20
52-week range
$42.05 - $96.07
Market cap
$6.26B
Balance sheet
Healthy
-1.33x Concerning
Net cash $778.70M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
0 Risks
2 rewards · 0 risks
View details ↓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 their systems, and protect against security threats. The company makes most of its money from subscriptions to this software, which creates predictable recurring revenue (income that comes in regularly, like a Netflix subscription). This is important because as businesses collect more data, they need tools to quickly understand it all to make better decisions and keep their operations running smoothly.
How the company got here
Elastic was founded in 2012 to commercialize the open-source search engine, Elasticsearch. This powerful tool was created by Shay Banon, who later co-founded the company. The company bundled Elasticsearch with two other open-source tools, Logstash (for data collection) and Kibana (for data visualization), to create what is known as the Elastic Stack (or ELK Stack). This trio of products allowed developers to easily search, analyze, and visualize large amounts of data. Elastic went public on the New York Stock Exchange under the ticker symbol ESTC in October 2018.
What it actually does
Think of Elastic as a company that provides a powerful search bar and analytical brain for businesses' data. Their software can sift through massive amounts of information, both structured (like spreadsheets) and unstructured (like emails and social media posts), to find what you're looking for and help you understand it. Companies use Elastic's tools to do things like power the search function on their own websites, monitor the health of their computer systems, and even detect cybersecurity threats. You can think of it as a super-powered search and analysis engine that businesses can build into their own products and operations.
Elastic Search
This is the core of Elastic's business and its original product. It provides a powerful search and analytics engine that companies can build into their own applications. For example, when you search for a product on a retail website or a ride on a ride-sharing app, there's a good chance that technology like Elasticsearch is working behind the scenes to quickly give you relevant results. Customers pay subscription fees to use the advanced features of this search technology and to get support from Elastic. This segment is foundational to everything else the company does.
Elastic Observability
This part of the business helps companies monitor the health and performance of their computer systems and applications. It's like a doctor for a company's technology, constantly checking for problems and helping to diagnose them when they arise. This is done by collecting and analyzing data like logs (records of events that happen in a system), metrics (measurements of performance), and traces (records of how a request travels through different parts of an application). Companies pay Elastic to have this unified view of their systems, which helps them keep everything running smoothly for their customers. This is currently their largest revenue segment.
Elastic Security
This segment uses Elastic's search and analytics capabilities to help companies protect themselves from cyber threats. It works by collecting and analyzing data from across a company's computer systems to detect and respond to things like hacking attempts and malware infections. Think of it as a security guard for a company's digital assets, constantly on the lookout for suspicious activity. Elastic entered this market more formally in 2019 and has grown this business line through acquisitions of other security companies.
Elastic Cloud
Instead of installing and managing Elastic's software on their own computers, customers can choose to use Elastic Cloud, where Elastic hosts and manages the software for them. This is a managed service where customers pay a subscription fee for access to the Elastic Stack without having to worry about the underlying technical details. This segment has been a major driver of the company's growth, offering customers a more convenient way to use Elastic's products. Revenue from Elastic Cloud comes from both subscriptions and consumption-based pricing.
What management is betting on now
Elastic is heavily focused on positioning itself as "The Search AI Company," aiming to be a critical part of the new wave of artificial intelligence applications. They are investing in making their search technology smarter, particularly for use with generative AI, which requires sifting through vast amounts of a company's own data to provide relevant and accurate answers. The company is also focused on a "land and expand" strategy, where they get a customer to start with one of their products and then encourage them to adopt more over time. Another key priority is growing their cloud offerings and expanding their partnerships with major cloud providers like Amazon Web Services, Google Cloud, and Microsoft Azure.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q1
$52.01M
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
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
Revenue
$347.42M
Net income
$-49.23M
Diluted EPS
-0.48
Operating cash flow
$52.75M
Free cash flow
$52.01M
Fetching…
Sources
Is it cheap or expensive?
Fair value $133.81 vs current price $60.20
Wall Street consensus is the average analyst price target: $74.52 (-44.3% lower than our fair-value estimate).
Our most-likely fair value is $133.81 a share — about 122.3% above today's price of $60.20, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $778.7M - more cash than debt. Interest coverage -1.3x.
Net debt
$-778.70M
Interest coverage
-1.33x
Elastic N.V. is healthier than 0 of 1 peers on balance-sheet leverage.
Healthy
Worse cushion
Baseline
Better cushion
ESTC
BASELINE
Elastic N.V.
Total debt $591.56M Interest coverage -1.33x This is the baseline the peer rows are being compared against.
What you should know
The case for and against ESTC
2 Rewards
0 Risks
Rewards
-
Revenue grew 17.3% last year.
-
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)
17.55x
Forward P/E
15.64x
P/B
4.94x
P/S
3.60x
EV/EBITDA
-191.09x
PEG ratio
1.37x
Profitability
How much profit each dollar creates
Gross margin
76.2%
Operating margin
-3.5%
Net margin
21.1%
ROE
33.4%
ROA
-0.7%
Health
Liquidity and balance-sheet strength
Debt / equity
0.46x
Current ratio
1.68x
Quick ratio
1.52x
Total debt
$591.56M
Total cash
$1.37B
Growth
How the business has been compounding
Revenue TTM
$1.74B
Revenue 5Y CAGR
19.2%
EPS TTM
3.43
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$326.89M
Free CF TTM
$321.80M
FCF margin
18.5%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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