Elastic NV (NYSE:ESTC) stock fell 1.30% (As on June 20, 1:27:52 AM UTC-4, Source: Google Finance) after DA Davidson initiated coverage of the company with a Neutral recommendation. The price target seems to have been set at $60.00 for Elastic. In more recent years, Elastic has diversified its business to sell threat detection software and application observability tools that companies can use to track network performance.
Meanwhile, the company has delivered strong fiscal fourth-quarter earnings results today, beating expectations. The company reported a net loss of $46.7 million, improving from the $65.6 million loss it posted one year ago. Earnings before certain costs such as stock compensation came to 22 cents per share on revenue of $279.9 million, up 17% from the year prior. They were good results, with Wall Street analysts targeting earnings of just nine cents per share on revenue of $277.2 million. For the full year, Elastic reported a net loss of $236.2 million, up from a loss of $203.8 million in fiscal 2022. Revenue for the year totaled $1.07 billion, up from $862.3 million a year earlier. Elastic has reported a total subscription customer count that rose to 20,200 at the end of the quarter, up from 18,600 at the end of fiscal 2022. Elastic’s number of customers who deliver at least $100,000 in annual recurring revenue rose to 1,160, up from just 960 a year earlier. It also reported a net expansion rate of 117%.
Elastic caused further dismay with its cautious guidance for the coming quarter. It said it’s expecting to see earnings of between 10 and 12 cents per share in the first quarter of fiscal 2024, with revenue of between $283 million and $286 million. Unfortunately, that wasn’t what investors wanted to hear, as Wall Street’s consensus estimate calls for earnings of 13 cents per share on revenue of $285.5 million. The company did at least offer more optimistic full-year guidance, saying it expects to see fiscal 2024 earnings of between 94 cents and $1.06 per share on revenue of $1.24 billion to $1.25 billion. Wall Street is looking for full-year earnings of 89 cents per share on revenue of $1.25 billion.
During the quarter, Elastic announced the availability of a promising new tool called the Elasticsearch Relevance Engine to power generative artificial intelligence applications. ESRE, as it’s known, will enable companies to build highly specialized AI models trained on their own proprietary data, both structured and unstructured.