ESTC - Elastic: Impressive Acceleration But Strength Is Already Priced In
2024-07-06 04:19:29 ET
Summary
- Elastic has seen a moderate performance in 2024 after rallying in late 2023, as valuation remains a big ceiling for the stock.
- Elastic currently trades at just shy of 8x current-year revenue, which is in line or slightly more expensive than peers.
- Revenue growth recently accelerated to 20% y/y, but the company is still citing headwinds in the self-service SMB sector.
- Those holding out hope that AI will be a big revenue booster may be disappointed, as just over ~10% of the company's customers generating >$100k in ACV are already using AI features.
The biggest theme driving the stock market this year continues to be AI, and Elastic ( ESTC ) was an early beneficiary of that trend. The enterprise search and observability company has been touting its multi-year experience with AI, which led to a sharp rally in late 2023....
Elastic: Impressive Acceleration, But Strength Is Already Priced In