Elastic NV. (ESTC) PT Lowered to $85 at UBS

UBS analyst Radi Sultan lowered the price target on Elastic NV. (NYSE: ESTC) to $85.00 (from $95.00) while maintaining a Buy rating.

The analyst commented, "ESTC reported a mixed F4Q26 with cloud revs again coming in light at $217.4m (-$1.1m q/q), a decel to 20% y/y growth and shy of the investor bogey for ~$220m of F4Q26 cloud revs (+21% y/y growth). ESTC also reported a lighter than expected total revs beat (+0.8% vs high-end of guide), delivering 16% growth in F4Q26, which the company partially pinned on a greater cloud mix shift which was a half point headwind to F4Q26 revs growth. However, on a positive note the prelim FY27 revenue growth outlook landed better than expected with an initial guide of 14.5% c/c growth at the midpoint, a point above the 13-14% many investors were expecting. While this appears to be due in part to better commit activity in FY26 (F4Q26 cRPO  was +20% y/y in c/c) we do believe the better than expected FY27 outlook is also a function of less management conservatism being baked into the FY27 guide (with some upside we believe 16% growth in FY27 may be doable). Given the deceleration in the cloud business over the past 3 quarters we think Elastic has become a "show me" story with all eyes on the cloud business and we don't expect the stock to re-rate materially higher until ESTC delivers several quarters of execution in the cloud business."

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