Search software company Elastic (NYSE: ESTC) will be announcing earnings results tomorrow after the bell. Here’s what you need to know.
Elastic beat analysts’ revenue expectations by 3.5% last quarter, reporting revenues of $382.1 million, up 16.5% year on year. It was a strong quarter for the company, with a solid beat of analysts’ billings estimates and EPS guidance for next quarter exceeding analysts’ expectations. It added 40 enterprise customers paying more than $100,000 annually to reach a total of 1,460.
Is Elastic a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Elastic’s revenue to grow 13.5% year on year to $380.3 million, slowing from the 19.7% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.37 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Elastic has missed Wall Street’s revenue estimates twice over the last two years.
Looking at Elastic’s peers in the data and analytics software segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Confluent delivered year-on-year revenue growth of 24.8%, beating analysts’ expectations by 2.6%, and Teradata reported a revenue decline of 10.1%, falling short of estimates by 2.4%. Confluent traded down 18.2% following the results while Teradata was up 1.8%.
Read our full analysis of Confluent’s results here and Teradata’s results here.
There has been positive sentiment among investors in the data and analytics software segment, with share prices up 8.5% on average over the last month. Elastic is up 9.6% during the same time and is heading into earnings with an average analyst price target of $124.02 (compared to the current share price of $94.25).
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
