Elastic N.V. (ESTC) Financial Analysis in the Tech Industry

Elastic N.V. (NYSE:ESTC) delivered a strong finish to its fiscal year with fourth-quarter results that topped expectations, but a cautious revenue outlook for the upcoming year triggered a 10% sell-off intra-day today.

The data analytics and search software company posted adjusted earnings of $0.47 per share on revenue of $388 million for the quarter, outpacing Wall Street estimates on both fronts. Revenue grew 16% year-over-year, driven largely by continued strength in its Elastic Cloud business, which surged 23% to $181.5 million.

However, the company’s guidance for fiscal 2026 left investors underwhelmed. Elastic projected annual revenue between $1.655 billion and $1.670 billion—below analyst expectations and implying a growth rate of about 12%, a deceleration compared to prior years.

Despite robust growth in large enterprise customers—with over 1,510 clients now generating more than $100,000 in annual contract value—investors appeared concerned about the company's ability to sustain its momentum in an increasingly competitive landscape, leading to sharp drop in the stock after the report.

• Elastic N.V. (NYSE:ESTC) has a Return on Invested Capital (ROIC) of -10.46%, indicating inefficiency in utilizing capital compared to its Weighted Average Cost of Capital (WACC) of 9.41%.
• Comparative analysis shows that most peers, except Datadog, also have negative ROICs, suggesting a common challenge in the sector.
• Datadog stands out with a positive ROIC of 1.24% and a WACC of 9.55%, highlighting its effective capital utilization and making it more attractive to investors.

Elastic N.V. (NYSE:ESTC) is a company known for its search-powered solutions, including the popular Elastic Stack, which comprises Elasticsearch, Kibana, Beats, and Logstash. These tools are widely used for data search, logging, and analytics. Elastic operates in a competitive landscape with peers like MongoDB, Smartsheet, Alteryx, Datadog, and HubSpot, all of which offer various data and analytics solutions.

Elastic's Return on Invested Capital (ROIC) is -10.46%, which is concerning as it indicates the company is not generating returns above its Weighted Average Cost of Capital (WACC) of 9.41%. This negative ROIC suggests that Elastic is not efficiently utilizing its capital, which could be a red flag for investors. The ROIC to WACC ratio of -1.11 further highlights this inefficiency.

Comparatively, MongoDB has a ROIC of -7.36% and a WACC of 9.75%, resulting in a ROIC to WACC ratio of -0.76. Smartsheet's ROIC is -5.88% with a WACC of 7.92%, leading to a ratio of -0.74. Alteryx shows a ROIC of -8.11% against a WACC of 5.84%, with a ratio of -1.39. These figures indicate that these companies, like Elastic, are also struggling to generate returns above their cost of capital.

Datadog, however, stands out with a positive ROIC of 1.24% and a WACC of 9.55%, resulting in a ROIC to WACC ratio of 0.13. This positive ratio suggests that Datadog is effectively generating returns above its cost of capital, making it more attractive to investors. In contrast, HubSpot has a ROIC of -0.47% and a WACC of 12.39%, with a ratio of -0.04, indicating a slight inefficiency in capital utilization.

Overall, while Elastic and most of its peers are currently operating with negative ROICs, Datadog's positive return on invested capital relative to its cost suggests better financial health and growth potential. Investors may find Datadog more appealing due to its efficient capital utilization.

• Elastic N.V. (NYSE:ESTC) has a Return on Invested Capital (ROIC) of -10.46%, indicating inefficiency in utilizing capital compared to its Weighted Average Cost of Capital (WACC) of 9.41%.
• Comparative analysis shows that most peers, except Datadog, also have negative ROICs, suggesting a common challenge in the sector.
• Datadog stands out with a positive ROIC of 1.24% and a WACC of 9.55%, highlighting its effective capital utilization and making it more attractive to investors.

Elastic N.V. (NYSE:ESTC) is a company known for its search-powered solutions, including the popular Elastic Stack, which comprises Elasticsearch, Kibana, Beats, and Logstash. These tools are widely used for data search, logging, and analytics. Elastic operates in a competitive landscape with peers like MongoDB, Smartsheet, Alteryx, Datadog, and HubSpot, all of which offer various data and analytics solutions.

Elastic's Return on Invested Capital (ROIC) is -10.46%, which is concerning as it indicates the company is not generating returns above its Weighted Average Cost of Capital (WACC) of 9.41%. This negative ROIC suggests that Elastic is not efficiently utilizing its capital, which could be a red flag for investors. The ROIC to WACC ratio of -1.11 further highlights this inefficiency.

Comparatively, MongoDB has a ROIC of -7.36% and a WACC of 9.75%, resulting in a ROIC to WACC ratio of -0.76. Smartsheet's ROIC is -5.88% with a WACC of 7.92%, leading to a ratio of -0.74. Alteryx shows a ROIC of -8.11% against a WACC of 5.84%, with a ratio of -1.39. These figures indicate that these companies, like Elastic, are also struggling to generate returns above their cost of capital.

Datadog, however, stands out with a positive ROIC of 1.24% and a WACC of 9.55%, resulting in a ROIC to WACC ratio of 0.13. This positive ratio suggests that Datadog is effectively generating returns above its cost of capital, making it more attractive to investors. In contrast, HubSpot has a ROIC of -0.47% and a WACC of 12.39%, with a ratio of -0.04, indicating a slight inefficiency in capital utilization.

Overall, while Elastic and most of its peers are currently operating with negative ROICs, Datadog's positive return on invested capital relative to its cost suggests better financial health and growth potential. Investors may find Datadog more appealing due to its efficient capital utilization.

Elastic N.V. (NYSE:ESTC) is a company known for its search-powered solutions, which help businesses enhance their data search capabilities. The company operates in a competitive landscape alongside peers like MongoDB, Smartsheet, Alteryx, Datadog, and HubSpot. These companies are all part of the tech industry, focusing on data management and analytics solutions.

Elastic N.V. has a Return on Invested Capital (ROIC) of -10.46% and a Weighted Average Cost of Capital (WACC) of 9.37%. This results in a ROIC to WACC ratio of -1.12, indicating that the company is not generating returns above its cost of capital. This is a red flag for investors, as it suggests inefficient capital utilization.

Comparatively, MongoDB has a ROIC of -7.36% and a WACC of 9.75%, leading to a ROIC to WACC ratio of -0.76. Smartsheet's figures are -5.88% for ROIC and 7.92% for WACC, with a ratio of -0.74. Both companies, like Elastic, are not generating returns above their cost of capital, but their ratios are slightly better than Elastic's.

Alteryx presents a ROIC of -8.11% and a WACC of 5.84%, resulting in a ROIC to WACC ratio of -1.39. This is worse than Elastic's ratio, indicating even less efficient capital utilization. Meanwhile, HubSpot has a ROIC of -0.47% and a WACC of 12.33%, with a ratio of -0.04, showing a closer balance between returns and capital cost.

Datadog stands out with a positive ROIC of 1.24% and a WACC of 9.50%, resulting in a ROIC to WACC ratio of 0.13. This indicates that Datadog is the only company among the peers generating returns above its cost of capital, suggesting better capital efficiency and potential for growth.

Elastic N.V. (NYSE:ESTC) delivered impressive third-quarter fiscal 2025 results, surpassing expectations and raising its full-year earnings outlook. The strong performance sent its shares soaring 13% intra-day today.

The company reported adjusted earnings per share of $0.63 for the quarter, well ahead of analyst estimates of $0.47. Revenue climbed 17% year-over-year to $382 million, outpacing the consensus forecast of $368.71 million.

Elastic Cloud, the firm’s primary growth driver, saw a robust 26% year-over-year increase in revenue, reaching $180 million. Additionally, the company expanded its high-value customer base, with the number of clients holding Annual Contract Values exceeding $100,000 growing to over 1,460 from more than 1,270 a year ago.

Buoyed by its Q3 success, Elastic raised its fiscal 2025 guidance, now projecting adjusted EPS between $1.91 and $1.96, above previous analyst expectations of $1.86. The company also forecasted full-year revenue in the range of $1.474 billion to $1.476 billion, reinforcing investor confidence in its growth trajectory.

Elastic N.V. (NYSE:ESTC) delivered impressive third-quarter fiscal 2025 results, surpassing expectations and raising its full-year earnings outlook. The strong performance sent its shares soaring 13% intra-day today.

The company reported adjusted earnings per share of $0.63 for the quarter, well ahead of analyst estimates of $0.47. Revenue climbed 17% year-over-year to $382 million, outpacing the consensus forecast of $368.71 million.

Elastic Cloud, the firm’s primary growth driver, saw a robust 26% year-over-year increase in revenue, reaching $180 million. Additionally, the company expanded its high-value customer base, with the number of clients holding Annual Contract Values exceeding $100,000 growing to over 1,460 from more than 1,270 a year ago.

Buoyed by its Q3 success, Elastic raised its fiscal 2025 guidance, now projecting adjusted EPS between $1.91 and $1.96, above previous analyst expectations of $1.86. The company also forecasted full-year revenue in the range of $1.474 billion to $1.476 billion, reinforcing investor confidence in its growth trajectory.