Yahoo Finance Should You Think About Buying Elastic N.V. (NYSE:ESTC) Now?
Let's talk about the popular Elastic N.V. (NYSE:ESTC). The company's shares saw significant share price movement during recent months on the NYSE, rising to highs of US$134 and falling to the lows of US$94.61. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Elastic's current trading price of US$104 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Elastic’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Elastic
Is Elastic Still Cheap?
According to our valuation model, Elastic seems to be fairly priced at around 11.48% above our intrinsic value, which means if you buy Elastic today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $93.03, there’s only an insignificant downside when the price falls to its real value. What's more, Elastic’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What does the future of Elastic look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Elastic, at least in the near future.
What This Means For You
Are you a shareholder? Currently, ESTC appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on ESTC for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on ESTC should the price fluctuate below its true value.
With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, we've found that Elastic has 3 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.
If you are no longer interested in Elastic, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
