Outlook: Elastic’s management is expected to flag strong, double‑digit YoY growth in its subscription‑and‑services segment for Q1 FY26. In the last three quarters the SaaS line‑of‑business has risen 28 % (Q4 FY24), 23 % (Q3 FY24) and 19 % (Q2 FY24) year‑over‑year, driven by expanding “Search‑AI” workloads, higher‑tier contracts and a growing ecosystem of observability and security add‑ons. Given the company’s continued focus on upselling existing customers, expanding into new verticals (e.g., cloud‑native security) and the broader market’s appetite for AI‑enabled search, analysts are projecting ≈20‑25 % YoY subscription‑and‑services revenue growth for the quarter ending 31 July 2025—well above the low‑single‑digit growth that many peers are seeing in a tightening spend environment.
Trading implications: If Elastic delivers the anticipated 20 %+ YoY increase, the stock could break out of its current consolidation range (≈$70‑$78) and retest the $85‑$90 resistance that aligns with the 200‑day moving average. A confirmed beat would also likely lift the forward‑PE multiple as the market prices in higher recurring‑revenue visibility, making a short‑term upside to the upside‑biased side of the risk‑reward spectrum. Conversely, any sign of sub‑15 % growth would expose the stock to a sell‑off toward the $65‑$68 support zone, where the recent low‑volume bounce has been trapped. Given the limited downside risk and the upside upside from a strong subscription beat, a moderate‑size long position (or a “buy‑the‑dip” if the price retreats to $68‑$70) is warranted ahead of the August 28 earnings call.