TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

<ul>
<li>Elastic just dramatically raised its revenue guidance for FY2025...implying a massive acceleration in revenue growth that the 18% move in the stock underplayed.</li>
<li>Dynatrace is a wildly profitable software company trading at a significant discount to its Rule of 40 metrics.</li>
<li>The overall observability space is red hot, unimpacted by macro factors and being overlooked by software investors.</li>
</ul>


Elastic just dramatically raised its revenue guidance for FY2025...implying a massive acceleration in revenue growth that the 18% move in the stock underplayed.
Dynatrace is a wildly profitable software company trading at a significant discount to its Rule of 40 metrics.
The overall observability space is red hot, unimpacted by macro factors and being overlooked by software investors.


Observability Is Not Just Datadog: Why Elastic and Dynatrace Are Great Longs

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

<ul>
<li>
<a href="https://www.smartkarma.com/entities/elastic-nv" target="_blank" data-smartkarma-citation="entities:27526:1" rel="noopener">Elastic NV (ESTC US)</a> , a leading search technology company, reported strong Q3 FY’22 results that topped estimates. Cloud revenue surged 79% year-over-year, and free cash flow was ~$3M. </li>
<li>
<a href="https://www.smartkarma.com/entities/elastic-nv" target="_blank" data-smartkarma-citation="entities:27526:1" rel="noopener">Elastic NV (ESTC US)</a>  shares underperformed in CY’22, with shares down ~37% YTD versus a ~29% loss on the WCLD – WisdomTree Cloud Computing Fund. </li>
<li>Shares of Elastic jumped to ~$87.00/share after the company reported third-quarter earnings the previous week, but then the stock erased early gains due to broader sell-off in tech shares. </li>
</ul>



Elastic NV (ESTC US) , a leading search technology company, reported strong Q3 FY’22 results that topped estimates. Cloud revenue surged 79% year-over-year, and free cash flow was ~$3M. 

Elastic NV (ESTC US)  shares underperformed in CY’22, with shares down ~37% YTD versus a ~29% loss on the WCLD – WisdomTree Cloud Computing Fund. 
Shares of Elastic jumped to ~$87.00/share after the company reported third-quarter earnings the previous week, but then the stock erased early gains due to broader sell-off in tech shares. 


Q3 FY’22 Earnings Review: Spectacular Revenue Growth Driven By The Cloud Business

<ul>
<li>
<a href="https://www.smartkarma.com/entities/elastic-nv" target="_blank" data-smartkarma-citation="entities:27526:1" rel="noopener">Elastic NV (ESTC US)</a>  has grown its ARR from ~$207 million as of Jul-18 to ~$760 million today and may become a multi-billion dollar unicorn in the future.  </li>
<li>We like the subscription-based freemium business model, strong net expansion rate, and acceleration in revenue growth of Elastic Cloud business, which currently represents ~33% of total revenue. </li>
<li>Elastic Search is one of the most popular search engines globally, and the company’s products have been downloaded more than 350 million times since 2013. </li>
</ul>



Elastic NV (ESTC US)  has grown its ARR from ~$207 million as of Jul-18 to ~$760 million today and may become a multi-billion dollar unicorn in the future.  
We like the subscription-based freemium business model, strong net expansion rate, and acceleration in revenue growth of Elastic Cloud business, which currently represents ~33% of total revenue. 
Elastic Search is one of the most popular search engines globally, and the company’s products have been downloaded more than 350 million times since 2013. 


Elastic: High-Profile Search Company With Attractive Fundamentals

<ul>
<li>
<a href="https://www.smartkarma.com/entities/elastic-nv" target="_blank" data-smartkarma-citation="entities:27526:1" rel="noopener">Elastic NV (ESTC US)</a> reported a solid quarter, reflecting strong cloud revenue growth, ~13% non-GAAP operating margin and rapid adoption of ESRE.</li>
<li>
<a href="https://www.smartkarma.com/entities/elastic-nv" target="_blank" data-smartkarma-citation="entities:27526:1" rel="noopener">Elastic NV (ESTC US)</a> shares rallied 35%+ during regular trading session and closed up ~37% on Friday at $110.20. I raised PT to $121 from $112.</li>
<li>However, I downgrade <a href="https://www.smartkarma.com/entities/elastic-nv" target="_blank" data-smartkarma-citation="entities:27526:1" rel="noopener">Elastic NV (ESTC US)</a> to Equal-weight from Overweight on valuation and expect the stock to trade in-line with peers.</li>
</ul>



Elastic NV (ESTC US) reported a solid quarter, reflecting strong cloud revenue growth, ~13% non-GAAP operating margin and rapid adoption of ESRE.

Elastic NV (ESTC US) shares rallied 35%+ during regular trading session and closed up ~37% on Friday at $110.20. I raised PT to $121 from $112.
However, I downgrade Elastic NV (ESTC US) to Equal-weight from Overweight on valuation and expect the stock to trade in-line with peers.


Elastic: 2Q’FY24 Earnings Review - Elastic Cloud Is a Bright Spot, PT Raised To $121

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Elastic NV delivered an all-around beat in the most recent quarterly result.</li><li>The company achieved a milestone with annual contract values exceeding $100,000, demonstrating Elastic's rising popularity as the preferred data analytics platform for real-time search use cases.</li><li>The second trend involved customers consolidating their operations onto the Elastic platform for multiple use cases, benefiting from Elastic's core strengths and unmatched value proposition in search, log analytics, and security analytics.</li></ul>

Elastic NV delivered an all-around beat in the most recent quarterly result.The company achieved a milestone with annual contract values exceeding $100,000, demonstrating Elastic's rising popularity as the preferred data analytics platform for real-time search use cases.The second trend involved customers consolidating their operations onto the Elastic platform for multiple use cases, benefiting from Elastic's core strengths and unmatched value proposition in search, log analytics, and security analytics.

Elastic N.V.: Riding the AI Wave - A Look at Their Market Dominance - Major Drivers

United States

Elastic N.V. provides information technology and data analysis services. The Company offers monitoring, security analysis, enterprise search, cloud computing, and open source application performance monitoring solutions. Elastic serves customers in the United States.

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Elastic NV (ESTC US)

Observability Is Not Just Datadog: Why Elastic and Dynatrace Are Great Longs

Observability software stocks are being overlooked in the recent valuation downdraft. Elastic is our top pick...it had a massive revenue guidance...

Aaron Gabin

Q3 FY’22 Earnings Review: Spectacular Revenue Growth Driven By The Cloud Business

Elastic Cloud remains a revenue growth driver as customers are spending more in the cloud, and the company expects $1B+ revenue in FY’23

Andrei Zakharov

Elastic: High-Profile Search Company With Attractive Fundamentals

Elastic is a high-profile search technology company and we believe current valuations look attractive for long-term investors

Andrei Zakharov

Elastic: 2Q’FY24 Earnings Review - Elastic Cloud Is a Bright Spot, PT Raised To $121

Elastic delivered a solid quarter, reflecting strong cloud revenue growth. Elastic shares rallied 35%+ during regular trading session and closed up...

Andrei Zakharov

Elastic N.V.: Riding the AI Wave - A Look at Their Market Dominance - Major Drivers

Elastic NV delivered an all-around beat in the most recent quarterly result. The company achieved a milestone with annual contract values...

Baptista Research

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