ESTC Should I Buy
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Elastic NV (ESTC) is not a strong buy at the moment for a beginner investor with a long-term strategy. The stock is currently in a bearish technical trend, with no significant positive trading signals or catalysts to suggest immediate upward momentum. While the company has demonstrated revenue growth and improving financial metrics, the broader sentiment around enterprise software and AI monetization remains cautious. For long-term investors, it may be prudent to monitor the stock for more favorable entry points or clearer signs of recovery.
The technical indicators for ESTC are bearish. The MACD histogram is negative and contracting, RSI is neutral at 36.635, and moving averages are in a bearish alignment (SMA_200 > SMA_20 > SMA_5). The stock is trading below key pivot levels, with support at 57.709 and resistance at 62.329. The stock has also experienced a recent price decline of -2.38% in the regular market and -1.89% post-market.
Elastic's Search AI Platform is used by over 50% of Fortune 500 companies, highlighting its strong market presence. The company has shown YoY revenue growth of 15.91% and improved net income and EPS metrics. Gross margin has also increased to 75.91%.
The stock is under pressure due to broader negative sentiment around enterprise software and AI monetization. Analysts have consistently lowered price targets, citing macroeconomic concerns and multiple compression. The stock has a bearish technical setup, and no significant insider or hedge fund activity has been reported. Additionally, the stock's implied volatility is high (82.41%), suggesting elevated risk.
In Q2 2026, Elastic reported revenue of $423.48M, up 15.91% YoY. Net income improved to -$51.28M, up 101.51% YoY. EPS increased to -$0.48, up 92% YoY. Gross margin improved to 75.91%, up 1.89% YoY. While the company is showing growth, it is still operating at a net loss.
Analysts maintain a mixed but cautious outlook on Elastic. RBC Capital, Rosenblatt, and Jefferies have lowered price targets while maintaining Buy or Outperform ratings. The consensus reflects concerns about macroeconomic conditions, AI monetization challenges, and multiple compression. The average price target has been revised downward, with the most recent target at $80.
