Stock Track | Elastic N.V. Plunges 10% Pre-Market on Weak Revenue Outlook Despite Strong Q4 Results

Stock Track
2025/05/30

Shares of Elastic N.V. (ESTC) are set to open sharply lower on Friday, plummeting 10.09% in pre-market trading following the company's release of its fourth-quarter fiscal year 2025 earnings report. Despite beating expectations for the quarter, investors are focusing on the disappointing full-year revenue guidance, overshadowing the company's recent strong performance.

Elastic reported impressive Q4 results, with non-GAAP earnings of $0.47 per diluted share, significantly surpassing the FactSet analyst consensus of $0.37. Revenue for the quarter ended April 30 came in at $388.4 million, also beating the Street's estimate of $380.4 million and showing robust growth from $335 million in the same period last year. CEO Ash Kulkarni highlighted the company's leadership in search AI, noting that customers are continuing to build generative AI applications and consolidate onto Elastic's platform.

However, the company's full-year revenue projection for fiscal 2026 fell short of expectations, projecting $1.655 billion to $1.67 billion compared to analysts' forecast of $1.678 billion. This softer-than-anticipated outlook has triggered a wave of target price cuts from major financial institutions. RBC reduced its target from $119 to $115, Wells Fargo from $150 to $120, Scotiabank from $137 to $95, TD Cowen from $105 to $90, Barclays from $124 to $105, and Morgan Stanley from $120 to $115. The series of downgrades reflects growing concerns about Elastic's long-term growth prospects, despite its strong position in the AI and search markets.

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