Analysts Positive On Elastic Despite Stock Selloff

By Sam Boughedda

Investing.com — You would have been forgiven for expecting a rise in Elastic NV (NYSE:ESTC) shares in the wake of its earnings report on Tuesday evening, but they have weakened over 16% despite posting a beat on earnings and revenue.

However, Monness Crespi and BofA analysts are bullish on the stock after it posted an per-share loss of 9 cents, beating analyst estimates for a loss of 16 cents a share, and revenue of $205.98 million, above the $194.57 million consensus.

“Customers are increasingly choosing Elastic Cloud to reduce complexity, automate operations, and make faster, data-driven decisions. Given the ongoing momentum, we expect Elastic Cloud revenue to exceed 50% of our total revenue in the next three years,” said Shay Banon, Elastic founder and CEO.

Monness Crespi analyst Brian White shared that positivity, telling investors that the results were "strong," the outlook was "healthy," and that the selloff is "silly."

The analyst said the fall in Elastic shares represents a buying opportunity for investors, with the company standing to benefit from an improving economy.

Meanwhile, BofA shared that sentiment, with analyst Koji Ikeda describing the company's results as good, pointing to its cloud revenue growing over 80% "again."

Ikeda added that the results support his opinion that the company is a "DevSecOps category disruptor."

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