ESTC - Embedded Expectations Analysis - 2020 12 01
Elastic N.V. (ESTC:USA) currently trades near historical highs relative to UAFRS-based(Uniform) assets, with a 21.5x Uniform P/B. At these levels, the market has expectations for profitability to positively inflect, but management may have concerns about Elastic Cloud, Observation solution, and free cash flow margin guidance
Specifically, management may lack confidence in their ability to meet their 2021 free cash flow margin guidance and take advantage of market opportunities. In addition, they may be exaggerating Elastic Cloud's scalability, and the Security solutions' capabilities. Furthermore, management may have concerns about the potential of their new unified agent, their pipeline's progress, and their clients' spending trends. Moreover, they may lack confidence in their ability to make the Observability solution more attractive to clients and win more government clients. Additionally, they may be exaggerating the strength of their results in a tough environment. Finally, management may be concerned about Enterprise Search solution's pricing system and may lack confidence in their ability to prevent network outages
Elastic is a search company. The company's products enable its users and customers to instantly find relevant information and insights in large amounts of data. The company provides the Elastic Stack, a set of software products that ingest and store data from any source, and in any format, and perform search, analysis, and visualization in milliseconds or less. The Elastic Stack is designed for direct use by developers to power a variety of use cases. The company also provides software solutions built on the Elastic Stack that address a variety of use cases. The Elastic Stack and the company's solutions are designed to run on premises, in public or private clouds, or in hybrid environments.
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