Elastic
Coverage of Elastic N.V. (NYSE: ESTC) was initiated with a Buy rating and a $100 price target. The implied upside from the most recent closing price of $75.49 is 32%. Crane believes Elastic has “one of the most compelling upside growth cases” in his coverage as he sees potential for the company to grow revenue 30%-plus year-over-year for three-plus years, with Cloud revenue growing 50%-plus. Elastic’s relationship with Amazon’s AWS was a key concern prior to the company’s most recent licensing change, but licensing changes have better protected its IP and should drive increased platform usage over the medium term.
The stock traded around $72 early Tuesday, in a 52-week range of $50.74 to $189.84. Shares are down over 38% year to date.
Splunk
Recent management changes at Splunk Inc. (NASDAQ: SPLK) are improving the investment case, according to Crane. He continued that its free cash flow is beginning to inflect back upward after a multiyear lull due to a cloud transition. Crane sees a “clear disconnect” between Splunk’s operating plan and current valuation. As a result, Canaccord Genuity started it with a Buy rating and a $130 price target, implying upside of 38% from the most recent closing price of $94.48.
Splunk stock has a 52-week trading range of $84.63 to $176.66, and it traded near $92 a share on Tuesday. The stock is down 17% year to date.
JFrog
For JFrog Ltd. (NASDAQ: FROG) Canaccord Genuity initiated coverage with a Buy rating and a $30 price target, implying upside of 32% from the most recent closing price of $22.78. Crane noted that he sees “a strong case” for multiple years of 30%-plus top-line growth and steadily expanding margins given his view that JFrog’s business is benefiting from security increasingly being factored in before software is built, rather than after it is deployed.
The stock traded at around $22 on Tuesday, in a 52-week range of $16.36 to $46.75. Shares are down over 23% year to date.
Originally posted at 24/7 Wall St.
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