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I've been in and out of this trade since 2019. In 2019, elastic sued Amazon for trademark infringement. They settled last week on "undisclosed terms". Elastic also had a major management change a couple weeks ago which caused a massive one day price drop. Shay Bannon, the founder and former CEO dropped to Chief Technology Officer and a new CEO was brought in. Earnings are being announced a bit later than expected on March 3. During the announcement of the change of CEO, Shay Bannon already said that they will beat on revenue and earnings:
No competitors other than Splunk the dinosaur and the companies who have forked elasticsearch. I'm a software engineer. My company uses elasticsearch. There's no chance we would use a fork of elasticsearch because of the potential for it to get abandoned.
I think they are going to do well on earnings, but I predict the big news here will be a new partnership with Amazon. The CEO change and the lawsuit settlement (which, if taken to court would have resulted in a victory for elastic) occuring so close together combined with a slightly delayed earnings announcement leads me to believe that something big will be announced during the earnings call. Combined with 43% YoY revenue growth and a P/S of only around 9-10, this is a slam dunk earnings play.
3/18 100C. Started buying last week, and will continue to average in over the next few days.