Why Elastic Stock Is Crashing Today

Core Insights - Elastic's quarterly results exceeded Wall Street expectations, but the stock is experiencing a significant decline due to concerns over future guidance [1][2][3] Financial Performance - Elastic reported non-GAAP earnings per share of $0.35 for Q1, surpassing the analyst estimate of $0.25 [3] - Revenue for the quarter was $347 million, exceeding Wall Street's target by $2.39 million, with an 18.1% year-over-year growth [3] - Adjusted earnings per share increased by 40% compared to the previous year [3] Guidance and Market Reaction - The company revised its sales guidance for the fiscal year to a range of $1.436 billion to $1.444 billion, indicating a potential annual growth of 14% [4] - Prior guidance suggested revenue between $1.468 billion and $1.48 billion, which would have represented a growth of approximately 16% [4] - Following the Q1 report, Bank of America downgraded its rating on Elastic and reduced its one-year price target from $140 to $90, citing higher risks and weak international demand [5] Future Expectations - Management anticipates an adjusted operating margin of around 12.5% and expects adjusted earnings per diluted share to be between $1.52 and $1.56, which is better than the average Wall Street target of $1.42 [6]