Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Bottom-Up

<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> delivered a high quality beat and raise and reported a modest upside to revenue and profitability. The start of the fiscal year looked strong.</li>
<li>The leading provider of search engine for enterprises and SMBs guided FY24 ahead of consensus estimates. I reiterate our Overweight rating on ESTC.</li>
<li>The 1Q print was outstanding, with +17% y/y revenue growth, a record non-GAAP Op Margin of ~10% and FCF margin of ~13%.</li>
</ul>



Elastic NV (ESTC US) delivered a high quality beat and raise and reported a modest upside to revenue and profitability. The start of the fiscal year looked strong.
The leading provider of search engine for enterprises and SMBs guided FY24 ahead of consensus estimates. I reiterate our Overweight rating on ESTC.
The 1Q print was outstanding, with +17% y/y revenue growth, a record non-GAAP Op Margin of ~10% and FCF margin of ~13%.


Elastic: Blowout 1QFY24 Earnings. Shares Popped ~20% On Heavy Volume

<ul>
<li>Following takeover rumors surrounding <a href="https://www.smartkarma.com/entities/new-relic-inc" target="_blank" data-smartkarma-citation="entities:16283:1" rel="noopener">New Relic Inc (NEWR US)</a> , private equity firms finally agreed to acquire a US-based low-cost observability provider for ~$6.5B.</li>
<li>American private equity firm Francisco Partners and global alternative asset manager TPG offered $87 per <a href="https://www.smartkarma.com/entities/new-relic-inc" target="_blank" data-smartkarma-citation="entities:16283:1" rel="noopener">New Relic Inc (NEWR US)</a> share in an all-cash transaction.</li>
<li>The <a href="https://www.smartkarma.com/entities/new-relic-inc" target="_blank" data-smartkarma-citation="entities:16283:1" rel="noopener">New Relic Inc (NEWR US)</a> Board of Directors approved the buyout deal, and is expected to close in late 2023 or early 2024.</li>
</ul>


Following takeover rumors surrounding New Relic Inc (NEWR US) , private equity firms finally agreed to acquire a US-based low-cost observability provider for ~$6.5B.
American private equity firm Francisco Partners and global alternative asset manager TPG offered $87 per New Relic Inc (NEWR US) share in an all-cash transaction.
The New Relic Inc (NEWR US) Board of Directors approved the buyout deal, and is expected to close in late 2023 or early 2024.


New Relic Takeover Valuation Analysis: The Buyout Price Looks Reasonable

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 managed to exceed analyst expectations in terms of revenue as well as earnings.</li><li>In Q4, total revenue increased by 19% year over year in constant currency, while Elastic Cloud increased by 30% year over year in constant currency.</li><li>The subscription revenue was $256 million, increasing 16% year over year or 18% in constant currency, and made up 91% of the overall revenue.</li></ul>

Elastic managed to exceed analyst expectations in terms of revenue as well as earnings.In Q4, total revenue increased by 19% year over year in constant currency, while Elastic Cloud increased by 30% year over year in constant currency.The subscription revenue was $256 million, increasing 16% year over year or 18% in constant currency, and made up 91% of the overall revenue.

Elastic N.V.: Does The Impressive Cloud Growth Make This A ‘Buy’? – Key Drivers

<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 4QFY23, reflecting a stronger-than-expected non-GAAP operating margin of ~9% and GAAP subscription gross margin of ~79%. </li>
<li>Elastic cloud revenue grew 28% y/y, representing 40% of total revenue. Elastic cloud is scaling well, and margins improved faster-than-anticipated. </li>
<li>We are concerned about slowing H1 FY24 y/y growth in total revenue and failure to achieve the $2B revenue mark in FY25. Price target to $112.</li>
</ul>



Elastic NV (ESTC US) reported a solid 4QFY23, reflecting a stronger-than-expected non-GAAP operating margin of ~9% and GAAP subscription gross margin of ~79%. 
Elastic cloud revenue grew 28% y/y, representing 40% of total revenue. Elastic cloud is scaling well, and margins improved faster-than-anticipated. 
We are concerned about slowing H1 FY24 y/y growth in total revenue and failure to achieve the $2B revenue mark in FY25. Price target to $112.


Focus On Profitability Expansion And Durable Growth: PT Reduced To $112 From $133

<ul><li>Elastic NV has managed to deliver another all-around beat in its last result and increased its revenue by 27% in the last quarter.</li><li>Though there have been challenges and obstacles in the macro environment recently, such as problems regarding the supply chain, Elastic has maintained its growth trajectory.</li><li>We also have a dedicated analysis of the company's Environmental, Social, and Governance (ESG) risk scores in order to evaluate the sustainability risk.</li></ul>

Elastic NV has managed to deliver another all-around beat in its last result and increased its revenue by 27% in the last quarter.Though there have been challenges and obstacles in the macro environment recently, such as problems regarding the supply chain, Elastic has maintained its growth trajectory.We also have a dedicated analysis of the company's Environmental, Social, and Governance (ESG) risk scores in order to evaluate the sustainability risk.

Elastic N.V.: Revolutionizing Data Organization and Management – Key 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)

Elastic: Blowout 1QFY24 Earnings. Shares Popped ~20% On Heavy Volume

Elastic beats expectations with strong Q1FY24 results, guiding FY24 ahead of consensus estimates. I remain bullish on the stock and see further...

Andrei Zakharov

New Relic Takeover Valuation Analysis: The Buyout Price Looks Reasonable

Private equity firms Francisco Partners and TPG have agreed to acquire New Relic for ~$6.5B, with the deal expected to close in late 2023 or early...

Andrei Zakharov

Elastic N.V.: Does The Impressive Cloud Growth Make This A ‘Buy’? – Key Drivers

Elastic managed to exceed analyst expectations in terms of revenue as well as earnings. In Q4, total revenue increased by 19% year over year in...

Baptista Research

Focus On Profitability Expansion And Durable Growth: PT Reduced To $112 From $133

Elastic remains my top pick in the observability and search space, and I see the potential for revenue growth re-acceleration in 2024.

Andrei Zakharov

Elastic N.V.: Revolutionizing Data Organization and Management – Key Drivers

Elastic NV has managed to deliver another all-around beat in its last result and increased its revenue by 27% in the last quarter. Though there...

Baptista Research

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Elastic: Blowout 1QFY24 Earnings. Shares Popped ~20% On Heavy Volume

​Elastic beats expectations with strong Q1FY24 results, guiding FY24 ahead of consensus estimates. I remain bullish on the stock and see further...

Andrei Zakharov

New Relic Takeover Valuation Analysis: The Buyout Price Looks Reasonable

​Private equity firms Francisco Partners and TPG have agreed to acquire New Relic for ~$6.5B, with the deal expected to close in late 2023 or early...

Andrei Zakharov

Elastic N.V.: Does The Impressive Cloud Growth Make This A ‘Buy’? – Key Drivers

Elastic managed to exceed analyst expectations in terms of revenue as well as earnings. In Q4, total revenue increased by 19% year over year in...

Baptista Research

Focus On Profitability Expansion And Durable Growth: PT Reduced To $112 From $133

Elastic remains my top pick in the observability and search space, and I see the potential for revenue growth re-acceleration in 2024.

Andrei Zakharov

Elastic N.V.: Revolutionizing Data Organization and Management – Key Drivers

Elastic NV has managed to deliver another all-around beat in its last result and increased its revenue by 27% in the last quarter. Though there...

Baptista Research

Elastic beats expectations with strong Q1FY24 results, guiding FY24 ahead of consensus estimates. I remain bullish on the stock and see further...

Private equity firms Francisco Partners and TPG have agreed to acquire New Relic for ~$6.5B, with the deal expected to close in late 2023 or early...