Yahoo Finance Elastic N.V. Just Reported Third-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?
There's been a major selloff in Elastic N.V. (NYSE:ESTC) shares in the week since it released its quarterly report, with the stock down 24% to US$48.76. The results were mixed overall, with revenues slightly ahead of analyst estimates at US$113m. Statutory losses by contrast were2.9% larger than predictions at US$0.55 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Elastic
Taking into account the latest results, the most recent consensus for Elastic from ten analysts is for revenues of US$576.3m in 2021, which is a huge 50% increase on its sales over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to US$2.34 on a statutory basis. Before this earnings announcement, analysts had been forecasting revenues of US$579.7m and losses of US$2.25 per share in 2021. There was no real change to the revenue estimates, but analysts do seem more bullish on earnings, given the earnings per share expectations following these results.
The consensus price target held steady at US$94.08, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Elastic at US$130 per share, while the most bearish prices it at US$75.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
In addition, we can look to Elastic's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. Next year brings more of the same, according to analysts, with revenue forecast to grow 50%, in line with its 45% annual growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So although Elastic is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider market.
The Bottom Line
The most obvious conclusion is that analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at US$94.08, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Elastic analysts - going out to 2022, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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