Elastic NV. (ESTC) PT Raised to $130 at Rosenblatt

Rosenblatt analyst Blair Abernethy raised the price target on Elastic NV. (NYSE: ESTC) to $130.00 (from $120.00) while maintaining a Buy rating.

The analyst comments "Elastic reported Q2 results that were ~3% above our revenue estimates at 18% Y/Y growth (17% in CC), with Elastic Cloud growing at 25% Y/Y, including some larger customers that grew consumption better than plan. In our view, Elastic has recovered from its Q1 sales reorganization disruption and is increasingly benefiting from customers building GenAI applications using its vector database features. With 1,550 Elastic Cloud customers now using the platform for GenAI, Search was the fastest growing area in Q2. Elastic also announced that the long-time CFO is leaving for another opportunity and a replacement search is underway. Looking ahead, Elastic increased its Q3 and FY25 revenue growth outlook by ~1% (note that the Q1 pipeline disruptions impacts the 2H Cloud ramp) and now expects FY25 operating margins of 14% (was 12.5%). Post Q2, we are marginally increasing our forecast as we are encouraged by the recovery in sales execution and the growing demand around GenAI application development. We are increasing our target price to $130 (was $120) and expect the stock to react positively in the near term to these results."

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