TD Cowen raises Elastic stock price target to $95 on cloud growth

TD Cowen has increased its price target for Elastic NV (NYSE: ESTC) to $95 from $70, while keeping a Hold rating on the shares. The investment firm highlighted strong cloud revenue growth of $18 million quarter-over-quarter, surpassing the Street's estimate of $13 million. Sales-Led Subscription revenue outperformed expectations by $5.5 million, and the company raised its full-year forecast by $6 million, projecting a 17% constant currency growth, which signifies a 100 basis point acceleration.

Elastic's revenue grew by 16% over the past year, demonstrating solid momentum, backed by a robust gross profit margin of 75.6%. However, billings growth of 6% fell short of expectations, while current remaining performance obligations expanded by 20%, remaining consistent with the previous quarter. Net revenue retention dipped by 100 basis points to 111%.

The company reported a record 80 net new customers with annual contract values exceeding $100,000. TD Cowen deemed the results better than anticipated. With a market capitalization of $8.7 billion, Elastic is undervalued relative to its Fair Value according to InvestingPro analysis. Investors can gain further insights through over 10 ProTips and detailed metrics available on the platform.

The firm mentioned that the implied second-half acceleration leaves limited room for upside. Elastic's fiscal first-quarter 2027 results also exceeded Wall Street estimates, with adjusted earnings of $0.70 per share and revenue of $478 million. This represented a 20.69% increase in earnings per share compared to forecasts. The strong earnings performance led to a significant surge in the stock price during after-hours trading. These developments underscore Elastic's impressive performance during the recent quarter.