Elastic’s Stock Gets Flooded With Price Target Hikes After Earnings Beat: Retail Is All In

Elastic NV ($ESTC) shares surged by as much as 27% on Friday after the company’s fiscal second-quarter (Q2) earnings report, covering the quarter ended Oct. 31, comfortably exceeded Wall Street expectations and pleased the majority of analysts on Wall Street. 

The American-Dutch data analytics company, known for its search applications and generative AI-powered Elasticsearch Relevance Engine (ESRE), showcased strong execution and a rebound in customer demand.

On an adjusted basis, Elastic reported a profit of $0.59 a share, on sales of $365 million, beating estimates of $0.38 cents a share on sales of $354 million.

The earnings beat led to more than 10 price-target hikes, reflecting optimism around Elastic’s recovery and growth potential.

Baird upgraded the stock to ‘Outperform’ from ‘Neutral’ with a new price target of $135 (up from $95), citing Elastic’s turnaround in execution, disciplined pipeline management, and growing generative AI adoption.

Rosenblatt raised its target to $130 (from $120), emphasizing Elastic’s ability to recover from Q1 sales disruption and benefit from generative AI application growth.

Stifel set a target of $132 (up from $98), describing Q2 as a “rebound quarter” with robust sales execution, multi-year commitments, and improving trends among large customers.

Guggenheim increased its target to $120 (from $100), highlighting broad-based consumption improvement and a strong pipeline following Q1 deal closures.

Elastic’s ESRE tool has reportedly been instrumental in attracting upgrades from customers, with generative AI applications becoming a focal point. 

The company’s CEO previously noted that while expenditures on generative AI solutions have not yet become a major revenue driver, Elastic remains well-positioned to capitalize on cost-conscious customers navigating uncertain market conditions.

ESTC sentiment meter and message volume on Nov 22 as of 11:00 am ET | source: Stocktwits

On Stocktwits, retail sentiment flipped to ‘extremely’ bullish early Friday as message volume surged. Retail traders expressed optimism about the stock’s potential for further gains, with some expecting it to reach new heights.

Elastic stock has gained just over 3% so far this year.

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