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Elastic N.V. (NYSE:ESTC) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Elastic outperformed on both revenues and the expected loss per share, with revenues of US$145m beating estimates by 11%. Statutory losses were US$0.34, 24% smaller thanthe analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Elastic's twelve analysts is for revenues of US$571.5m in 2021, which would reflect a decent 12% improvement in sales compared to the last 12 months. Losses are expected to hold steady at around US$1.49. Before this latest report, the consensus had been expecting revenues of US$549.0m and US$1.77 per share in losses. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a loss per share in particular.
The consensus price target rose 9.6% to US$145, with the analysts encouraged by the higher revenue and lower forecast losses for next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Elastic, with the most bullish analyst valuing it at US$160 and the most bearish at US$125 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Elastic's revenue growth is expected to slow, with forecast 12% increase next year well below the historical 49% growth over the last year. Compare this to the 417 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 13% per year. Factoring in the forecast slowdown in growth, it looks like Elastic is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Elastic going out to 2025, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 5 warning signs for Elastic (1 is significant) you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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