ESTCElastic N.V.
Is the business good?
The checks split: nothing decisive, though margins widening.
Operating margin has widened over the past few years, the business is getting more profitable per dollar of sales.
Margin-driven, fat margins on slower asset turns. ROE 9% = margin × turnover × leverage.
All from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is ESTC?
Elastic N.V. earns −9.2% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 18 points below what the capital costs: growth destroys value
- Operating margin
- −2.6%
Operating margin · Software - Application median 6.4% · 12 months to Q1 2027
- Share count, year on year
- −1.3%
Share count, year on year · bought back, each share owns more of the company
- R&D as % of revenue
- 25%
R&D as % of revenue
| Year | Operating margin |
|---|---|
| FY2021 | −21% |
| FY2022 | −20% |
| FY2023 | −21% |
| FY2024 | −10% |
| FY2025 | −3.7% |
| FY2026 | −1.9% |
Details›
- Gross margin12 months to Q1 2027
- 76%
- Operating margin12 months to Q1 2027
- −2.6%
- Net margin12 months to Q1 2027
- 21%
- Free cash flow margin
- 19%
- R&D as % of revenue
- 25%
- Revenue, trailing twelve months
- $1.80B
- Free cash flow, trailing twelve months
- $349M
- Net income, trailing twelve months
- $376M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- −9.2%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.