ESTC
Elastic N.V
TMT
01/26/2023
Presented
| Date | 01/19/2023 |
| Price | $50.85 |
| Market Cap | $4.86B |
| Ent Value | $5.83B |
| P/E Ratio | N/A |
| Book Value | $4.10 |
| Div Yield | 0% |
| Shares O/S | 95.61M |
| Ave Daily Vol | 1,529,095 |
| Short Int | 6.06% |
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: Amazon.com Inc (AMZN), Elastic NV (ESTC), Splunk Inc (SPLK)
Highlights
The presenter is long shares of Elastic NV (ESTC), which allows enterprise websites and applications to build search capabilities. Approximately 1/3 of the company’s revenue comes from the enterprise search market, but the rest of the revenue and most of the growth comes from log management and the broader observability market where ESTC competes with SPLK. The stock has been beaten down due to recent topline growth deceleration and now trades at 3.7x consensus NTM revenue, but the presenter attributes the deceleration to cyclical factors rather than competitive issues. As comps become easier in the second half of the calendar year, he expects the combination of underlying market growth, positive market share trends, the introduction of cloud versions of ESTC’s products, and new products to reaccelerate topline growth to 20% – 30%. In turn, this should allow the stock to rerate to a much higher multiple.
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