UBS gave software company Elastic (ESTC.US) a “buy” rating with a target price of $135. The bank emphasized that its potential in the field of artificial intelligence was underestimated.
The Zhitong Finance App learned that UBS gave the software company Elastic (ESTC.US) a “buy” rating, with a target price of 135 US dollars. The bank emphasized that its potential in the field of artificial intelligence was underestimated.
The bank said Elastic's outlook is supported by its Elasticsearch Related Engine (ESRE), which is expected to increase revenue by $15 million in fiscal year 2025.
According to UBS's analysis, Elastic will show a strong growth trajectory, with an expected growth rate of 18.7% in FY2025, exceeding the 17.3% forecast in the market. This optimism is supported by customer feedback, which indicates significant investment in Elastic's AI capabilities and is expected to increase spending by 15% this year.
The investment bank also identified several key growth drivers for Elastic. The company's position in the market provides a competitive advantage, particularly over pure vector databases. Elastic's hybrid search model and its stable partner growth prospects for 2024 (in the range of 20-30%) further reinforce this positive view.
As free cash flow margins expand and undervalued revenue grows, UBS sees Elastic NV as a compelling investment opportunity that current market valuations have yet to fully capture.