ESTC
Elastic N.V.
$54.81
High-Growth Software
80%
Revenue × Terminal Margin DCF
Strong
·
Conviction
Undervalued
Trading 43.0% below fair value
You pay
$54.81
Bear
$47.88
Fair
$96.13
Bull
$155.97
Bear
$47.88
-12.6%
15% rev growth, 17% terminal margin
Fair
$96.13
+75.4%
26% rev growth, 23% terminal margin
Bull
$155.97
+184.6%
33% rev growth, 26% terminal margin
Key Value Driver
Revenue growth (26%) × margin expansion to 23%
Terminal Value % of EV
59%
Implied Market Multiple
3.3x
Summary
Our base-case estimate uses a discounted cash flow model based on revenue growth and long-run free cash flow margins. We then blend that result with the average analyst price target of $59.67 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $96.13 per share.
Warnings
Wall Street's average price target is $59.67 (from 34 analysts). Our estimate is 87% above the consensus -- consider that gap carefully.
Key Risks
- Current FCF misleads — the model values future margins, not today's cash
- SBC dilution is the hidden tax: 2-4% annual share growth compounds fast
- Revenue deceleration is inevitable — the question is when and how steep