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Elastic (ESTC): Rethinking Valuation After New Amazon Bedrock AgentCore Observability Integration

Simply Wall St · 2d ago

Elastic (ESTC) just rolled out a new integration with Amazon Bedrock AgentCore, giving customers deeper observability into AI agents and applications, a timely upgrade as investors reassess the stock after a choppy year.

See our latest analysis for Elastic.

That backdrop helps explain why, despite a handy 7 day share price return of 5.42 percent, Elastic’s 30 day share price return of negative 16.72 percent and year to date share price return of negative 25.60 percent sit alongside a far healthier 3 year total shareholder return of 36.13 percent. This suggests long term momentum remains intact even as sentiment cools in the near term around the latest AI and buyback headlines.

If this AI driven story has your attention, it might be worth seeing what else is shaping the space by exploring high growth tech and AI stocks.

With the stock down sharply this year yet trading at a hefty discount to Wall Street targets despite solid growth, is Elastic quietly offering mispriced AI upside, or is the market already discounting its future expansion?

Most Popular Narrative Narrative: 31.7% Undervalued

Compared to Elastic's last close at $73.73, the most followed narrative sees fair value far higher, framing the current drawdown as a valuation disconnect.

Ongoing platform consolidation trends, where enterprises seek unified solutions for search, observability, and security, are enabling Elastic to displace legacy providers and drive cross-selling of its integrated offerings, leading to deeper customer relationships and improved net dollar retention rates.

Read the complete narrative.

Curious how this story justifies a richer future multiple, rising margins, and faster top line growth, all discounted at a single hurdle rate? The detailed narrative reveals the specific revenue ramp, profitability shift, and valuation bridge that underpin that higher fair value.

Result: Fair Value of $107.96 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this upside depends on Elastic outpacing hyperscaler competition and avoiding commoditization, which could squeeze pricing power, margins, and long term growth.

Find out about the key risks to this Elastic narrative.

Build Your Own Elastic Narrative

If you would rather examine the assumptions yourself and test different scenarios, you can build a personalized view of Elastic in minutes, Do it your way.

A great starting point for your Elastic research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.