📊 ESTC Key Takeaways
Is Elastic N.V. (ESTC) a Good Investment?
Elastic demonstrates strong fundamental health with 17.3% revenue growth, exceptional 76.1% gross margins, and robust free cash flow generation of $321.8M despite operating losses. However, the company's negative operating margin (-1.9%) and reliance on non-operating items for net income profitability require closer monitoring to confirm a sustainable path to operating profitability.
Elastic shows solid top-line momentum with 17.0% revenue growth, strong 76.3% gross margins, and healthy free cash flow generation, indicating a resilient software model with improving scale economics. However, the business remains GAAP unprofitable, with negative operating margin, negative ROE, and weak interest coverage, so the fundamentals support a constructive but cautious stance rather than a clearly bullish one.
Elastic N.V. Key Strengths (ESTC)
- Strong revenue growth (17.3% YoY) with exceptional gross margins (76.1%) indicating valuable software products
- Robust cash generation with $321.8M free cash flow and 18.5% FCF margin despite operating losses
- Solid balance sheet with 0.45x debt-to-equity, $768.7M cash reserves, and strong liquidity ratios (1.68x current)
- Revenue growth remains strong at 17.0% YoY, indicating continued demand and solid execution
- High gross margin of 76.3% supports attractive unit economics and long-term operating leverage potential
- Free cash flow of $171.99M and cash balance of $737.24M provide meaningful financial flexibility
ESTC Stock Risks: Elastic N.V. Investment Risks
- Negative operating income (-$33.5M) and negative operating margin (-1.9%) despite growing revenue signals profitability challenges
- Unable to cover debt service from operations (interest coverage ratio of -1.3x), creating dependency on cash reserves
- Net income appears driven by non-operating items rather than core business performance; zero net income YoY growth despite revenue gains
- Net income and operating income remain negative, showing profitability has not fully scaled with growth
- Interest coverage is negative, indicating earnings are currently insufficient to comfortably cover financing costs
- EPS deterioration suggests shareholder returns remain pressured despite revenue growth and positive cash flow
Key Metrics to Watch
- Operating margin trajectory - must demonstrate path to positive operating profitability
- Free cash flow sustainability - ensure continued strong FCF generation
- Revenue growth rate and operating expense growth ratio - critical to achieving operating leverage
- Operating margin trend toward sustained GAAP profitability
- Free cash flow margin durability as revenue continues to scale
Elastic N.V. (ESTC) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Elastic N.V. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
ESTC Profit Margin, ROE & Profitability Analysis
ESTC vs Technology Sector: How Elastic N.V. Compares
How Elastic N.V. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Elastic N.V. Stock Overvalued? ESTC Valuation Analysis 2026
Based on fundamental analysis, Elastic N.V. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Elastic N.V. Balance Sheet: ESTC Debt, Cash & Liquidity
ESTC Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Elastic N.V.'s revenue has grown significantly by 102% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.59 reflects profitable operations.
ESTC Revenue Growth, EPS Growth & YoY Performance
ESTC Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $382.1M | $7.8M | $0.07 |
| Q2 2026 | $365.4M | -$25.5M | $-0.25 |
| Q1 2026 | $347.4M | -$24.6M | $-0.23 |
| Q3 2025 | $328.0M | -$17.1M | $-0.16 |
| Q2 2025 | $310.6M | -$24.8M | $-0.25 |
| Q3 2024 | $274.6M | -$72.6M | $-0.76 |
| Q2 2024 | $264.4M | -$24.8M | $-0.74 |
| Q1 2024 | $250.1M | -$48.5M | N/A |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Elastic N.V. Dividends, Buybacks & Capital Allocation
ESTC SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Elastic N.V. (CIK: 0001707753)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ESTC
What is the AI rating for ESTC?
Elastic N.V. (ESTC) has a Combined AI Grade of A from Claude (A) and ChatGPT (B) with 78% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ESTC's key strengths?
Claude: Strong revenue growth (17.3% YoY) with exceptional gross margins (76.1%) indicating valuable software products. Robust cash generation with $321.8M free cash flow and 18.5% FCF margin despite operating losses. ChatGPT: Revenue growth remains strong at 17.0% YoY, indicating continued demand and solid execution. High gross margin of 76.3% supports attractive unit economics and long-term operating leverage potential.
What are the risks of investing in ESTC?
Claude: Negative operating income (-$33.5M) and negative operating margin (-1.9%) despite growing revenue signals profitability challenges. Unable to cover debt service from operations (interest coverage ratio of -1.3x), creating dependency on cash reserves. ChatGPT: Net income and operating income remain negative, showing profitability has not fully scaled with growth. Interest coverage is negative, indicating earnings are currently insufficient to comfortably cover financing costs.
What is ESTC's revenue and growth?
Elastic N.V. reported revenue of $1.7B.
Does ESTC pay dividends?
Elastic N.V. does not currently pay dividends.
Where can I find ESTC SEC filings?
Official SEC filings for Elastic N.V. (CIK: 0001707753) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ESTC's EPS?
Elastic N.V. has a diluted EPS of $3.43.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is ESTC's fundamental grade?
Based on our AI fundamental analysis in June 2026, Elastic N.V. has a A grade with 78% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is ESTC stock overvalued or undervalued?
Valuation metrics for ESTC: ROE of 28.8% (sector avg: 22%), net margin of 21.1% (sector avg: 18%). Higher ROE suggests strong returns relative to peers.
What is ESTC's AI grade for 2026?
Our dual AI analysis gives Elastic N.V. a combined A grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is ESTC's free cash flow?
Elastic N.V.'s operating cash flow is $326.9M, with capital expenditures of $5.1M. FCF margin is 18.5%.
How does ESTC compare to other Technology stocks?
Vs Technology sector averages: Net margin 21.1% (avg: 18%), ROE 28.8% (avg: 22%), current ratio 1.68 (avg: 2.5).
Why is ESTC's return on equity (ROE) so high?
Elastic N.V. has a return on equity of 28.8%, significantly above the Technology sector average of 22%. A high ROE indicates the company is efficient at generating profits from shareholder equity. This is supported by a 21.1% net margin.