ESTC
Elastic N.V
TMT
09/23/2021
Presented
| Date | 09/17/2021 |
| Price | $164.09 |
| Market Cap | $15.06B |
| Ent Value | $13.10B |
| P/E Ratio | N/A |
| Book Value | $4.97 |
| Div Yield | 0% |
| Shares O/S | 91.80M |
| Ave Daily Vol | 688,681 |
| Short Int | 12.68% |
Current
| Price | $82.18 |
| Market Cap | $8.44B |
| Elastic NV engages in the provision of open source search and analytics engine services. It offers Elastic Stack, a set of software products that ingest and store data from various sources and formats, as well as perform search, analysis, and visualization. The firms Elastic Stack product comprises Elasticsearch, a distributed, real-time search and analytics engine, and data store for various types of data, including textual, numerical, geospatial, structured, and unstructured; Kibana, a user interface, management, and configuration interface for the Elastic Stack; Beats, a single-purpose data shippers for sending data from edge machines to Elasticsearch or Logstash; and Logstash, a data processing pipeline for ingesting data into Elasticsearch or other storage systems. It also provides software solutions on the Elastic Stack that address cases, including app search, site search, enterprise search, logging, metrics, application performance management, business analytics, and security analytics. Its products are used by individual developers and organizations of a range of industries. The company was founded by Shay Banon, Uri Boness, Steven Schuurman, and Simon Willnauer on February 9, 2012 and is headquartered in Mountain View, CA. |
Publicly traded companies mentioned herein: Alphabet Inc (GOOGL), Amazon.com Inc (AMZN), Datadog Inc (DDOG), Dynatrace Inc (DT), Elastic NV (ESTC), International Business Machines Corp (IBM), Microsoft Corp (MSFT), MongoDB Inc (MDB), New Relic Inc (NEWR), Splunk Inc (SPLK)
Highlights
The presenter is long shares of Elastic NV (ESTC), which he views as a leading infrastructure SaaS provider that can capitalize on its Search, Observability, and Security offerings within a large TAM. He thinks ESTC can grow its Elastic Cloud product 80% - 90% for the next 3 - 4 quarters, which will help sustain ~40% revenue growth for the next couple of years. Shares currently trade at $165, or a low- to mid-teen sales multiple; this is a 50% - 70% discount to DDOG and MDB, and he assumes very slight multiple expansion (15x sales) to arrive at a $230 - $250 price target in the next year. By 2026, he projects $3.5B in revenues and 20% FCF margins, applying a 12x sales multiple and 60x FCF multiple to reach $400+ per share (25% IRR).
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