In today’s rapidly evolving tech landscape, choosing the right investment can be challenging. In this analysis, I will compare two innovative players in the software industry: Informatica Inc. (INFA) and Elastic N.V. (ESTC). Both companies operate within the technology sector, focusing on data management and analytics, yet they employ distinct strategies and cater to different market needs. As we delve into their offerings and growth potential, I aim to help you determine which company may present a more enticing opportunity for your investment portfolio.
Table of contents
Company Overview
Informatica Inc. Overview
Informatica Inc. is a prominent player in the software infrastructure sector, providing an AI-powered data management platform aimed at unifying and managing data across hybrid and multi-cloud environments. Founded in 1993 and based in Redwood City, California, Informatica’s offerings include a comprehensive suite of data integration, quality, and governance tools, designed to deliver a single authoritative source of truth for business-critical data. The company’s mission is to empower organizations by enabling them to harness their data for analytics, compliance, and operational efficiency. With a market capitalization of approximately $7.5B, Informatica has positioned itself as a key enabler of data-driven decision-making for enterprises.
Elastic N.V. Overview
Founded in 2012 and headquartered in Mountain View, California, Elastic N.V. specializes in search technology solutions that thrive in multi-cloud environments. Its flagship product, the Elastic Stack, encompasses a suite of tools for data ingestion, storage, and real-time analytics, catering to a diverse range of data types. Elastic’s mission is to simplify data search and analysis, empowering users to gain insights quickly and effectively. With a market cap of around $7.4B, Elastic has carved out a niche in the application software industry, focusing on delivering innovative solutions that cater to the growing demand for data visibility and operational intelligence.
Key similarities and differences
Both Informatica and Elastic operate within the technology sector, focusing on data management solutions, yet their approaches differ significantly. Informatica emphasizes comprehensive data integration and governance across enterprise systems, while Elastic concentrates on real-time search and analytics capabilities. This distinction highlights Informatica’s focus on data unification versus Elastic’s strength in data accessibility and exploration.
Income Statement Comparison
In this section, I present a comparative overview of the income statements for Informatica Inc. and Elastic N.V. for their most recent fiscal years. This analysis will help you evaluate their financial performance and operational efficiency.
| Metric | Informatica Inc. | Elastic N.V. |
|---|---|---|
| Market Cap | 7.54B | 7.44B |
| Revenue | 1.64B | 1.48B |
| EBITDA | 338M | 6M |
| EBIT | 199M | -6M |
| Net Income | 9.93M | -108M |
| EPS | 0.03 | -1.04 |
| Fiscal Year | 2024 | 2025 |
Interpretation of Income Statement
Over the last fiscal year, Informatica showed a positive revenue growth of 3% from the previous year, increasing to $1.64B, while Elastic experienced a significant rise in revenue from $1.27B to $1.48B, marking a notable recovery. Despite this, Elastic’s net income remained negative at -$108M, indicating ongoing challenges. Informatica’s margins improved, as reflected in its EBITDA of $338M, suggesting enhanced operational efficiency. Meanwhile, Elastic’s margins deteriorated, with an EBITDA of only $6M, highlighting potential inefficiencies and the need for strategic adjustments to improve profitability moving forward.
Financial Ratios Comparison
The following table presents a comparison of the most recent financial ratios for Informatica Inc. (INFA) and Elastic N.V. (ESTC).
| Metric | INFA | ESTC |
|---|---|---|
| ROE | 0.43% | -11.66% |
| ROIC | 0.56% | -11.80% |
| P/E | -66.39 | -82.65 |
| P/B | 3.39 | 9.64 |
| Current Ratio | 1.82 | 1.92 |
| Quick Ratio | 1.82 | 1.92 |
| D/E | 0.81 | 0.64 |
| Debt-to-Assets | 35.24% | 22.95% |
| Interest Coverage | 0.87 | -2.17 |
| Asset Turnover | 0.31 | 0.57 |
| Fixed Asset Turnover | 8.75 | 51.28 |
| Payout ratio | 0.0012 | 0 |
| Dividend yield | 0.0002% | 0% |
Interpretation of Financial Ratios
Informatica’s ratios indicate a challenging financial position, particularly with a negative ROE and P/E. Elastic, while also struggling with negative profitability, shows a lower debt-to-assets ratio and a stronger asset turnover. Both companies face liquidity concerns, but Informatica has a slightly better current ratio. Investors should remain cautious due to the negative profit margins and high P/E ratios, suggesting overvaluation and ongoing financial struggles.
Dividend and Shareholder Returns
Informatica Inc. (INFA) pays a nominal dividend with a payout ratio of only 0.0012%, indicating limited shareholder returns through dividends. Despite this, the company engages in share buybacks, which can enhance shareholder value by reducing share count. Conversely, Elastic N.V. (ESTC) does not distribute dividends as it prioritizes reinvestment for growth, reflected in its negative net income. Both companies’ strategies may support long-term value creation, but the sustainability of these approaches warrants careful monitoring.
Strategic Positioning
Informatica Inc. (INFA) holds a significant position in the data management sector, with a market cap of 7.54B and a robust suite of AI-powered products. Its competitive edge lies in comprehensive data integration and governance solutions, although it faces pressure from emerging players. Conversely, Elastic N.V. (ESTC) specializes in search technology, with a market cap of 7.43B, and is known for its innovative Elastic Stack. Both companies must navigate technological disruption while maintaining market share against growing competition.
Stock Comparison
In the past year, Informatica Inc. (INFA) and Elastic N.V. (ESTC) have exhibited notable price movements, reflecting distinct trading dynamics that warrant attention for potential investment decisions.
Trend Analysis
Informatica Inc. (INFA): Over the past year, INFA’s stock has experienced a -12.68% decline, indicating a bearish trend. The highest price was $38.48, while the lowest was $16.67, suggesting significant volatility with a standard deviation of 4.46. The recent trend, however, shows a minor increase of 0.08% since early September, although this is negligible and indicates stabilization rather than a reversal.
Elastic N.V. (ESTC): ESTC has faced a more pronounced -32.25% decrease over the same period, also categorizing it as bearish. The stock peaked at $130.39 and dropped to a low of $70.04, demonstrating high volatility with a standard deviation of 14.9. Recently, there has been a sharp decline of -19.43% since mid-September, suggesting a deceleration in price movement.
In summary, both stocks are currently in bearish trends, with INFA showing signs of stabilization and ESTC experiencing significant downward pressure. Investors should proceed with caution and consider these trends when making portfolio decisions.
Analyst Opinions
Recent analyst recommendations for Elastic N.V. (ESTC) indicate a cautious stance, with a C- rating reflecting concerns about its financial metrics. Analysts emphasize weaknesses in return on equity and asset management, contributing to an overall score of 1. There are currently no recommendations for Informatica Inc. (INFA), leaving investors without a clear direction. The consensus for ESTC leans toward a “hold” position for 2025, suggesting investors should exercise caution before making significant moves.
Stock Grades
Recent evaluations of stock grades reveal significant trends for Informatica Inc. (INFA) and Elastic N.V. (ESTC).
Informatica Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Guggenheim | downgrade | Neutral | 2025-08-07 |
| UBS | maintain | Neutral | 2025-08-07 |
| Baird | maintain | Neutral | 2025-05-28 |
| JP Morgan | downgrade | Neutral | 2025-05-28 |
| RBC Capital | maintain | Sector Perform | 2025-05-28 |
| Wolfe Research | downgrade | Peer Perform | 2025-05-28 |
| Wells Fargo | maintain | Equal Weight | 2025-05-28 |
| Truist Securities | downgrade | Hold | 2025-05-28 |
| RBC Capital | maintain | Sector Perform | 2025-05-27 |
| UBS | maintain | Neutral | 2025-05-16 |
Elastic N.V. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | maintain | Buy | 2025-11-24 |
| JP Morgan | maintain | Overweight | 2025-11-21 |
| Piper Sandler | maintain | Overweight | 2025-11-21 |
| Cantor Fitzgerald | maintain | Neutral | 2025-11-21 |
| Wells Fargo | maintain | Equal Weight | 2025-11-21 |
| DA Davidson | maintain | Neutral | 2025-11-21 |
| Stifel | maintain | Buy | 2025-11-21 |
| Morgan Stanley | maintain | Overweight | 2025-11-21 |
| Truist Securities | maintain | Buy | 2025-11-21 |
| Guggenheim | maintain | Buy | 2025-11-21 |
In summary, Informatica Inc. is experiencing a notable trend of downgrades, indicating a cautious outlook from several analysts, while Elastic N.V. maintains a generally favorable rating with several firms supporting a “Buy” stance. This divergence suggests different market sentiments towards these two companies, highlighting the importance of ongoing risk assessment in investment decisions.
Target Prices
The current consensus among analysts indicates strong target prices for both Informatica Inc. and Elastic N.V.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Informatica Inc. | 27 | 27 | 27 |
| Elastic N.V. | 134 | 76 | 108 |
For Informatica Inc., the target consensus aligns with its current price of 24.79, suggesting potential upside. Conversely, Elastic N.V.’s consensus of 108 presents a significant difference from its current price of 70.53, indicating bullish expectations from analysts.
Strengths and Weaknesses
The following table outlines the strengths and weaknesses of Informatica Inc. (INFA) and Elastic N.V. (ESTC), based on the most recent data available.
| Criterion | Informatica Inc. | Elastic N.V. |
|---|---|---|
| Diversification | Moderate | High |
| Profitability | Low | Negative |
| Innovation | High | Moderate |
| Global presence | Strong | Strong |
| Market Share | Moderate | Growing |
| Debt level | Moderate | Low |
Key takeaways indicate that while Informatica exhibits strong global presence and innovation, it struggles with profitability. Elastic, on the other hand, shows significant growth potential with a high degree of diversification but faces profitability challenges.
Risk Analysis
Below is a summary of the risks associated with Informatica Inc. (INFA) and Elastic N.V. (ESTC).
| Metric | Informatica Inc. | Elastic N.V. |
|---|---|---|
| Market Risk | High | Moderate |
| Regulatory Risk | Moderate | High |
| Operational Risk | High | Moderate |
| Environmental Risk | Low | Moderate |
| Geopolitical Risk | Moderate | High |
In summary, both companies face significant operational and regulatory risks. Elastic N.V. has been rated C- due to concerns over its financial stability, while Informatica Inc. exhibits high market risk, largely due to its volatile market presence. A cautious approach is advisable when considering investments in these firms.
Which one to choose?
When comparing Informatica Inc. (INFA) and Elastic N.V. (ESTC), both companies show challenges, but their metrics offer distinct insights. INFA has a market cap of approximately $7.8B and a bearish stock trend, with a price-to-earnings ratio exceeding 787, indicating high valuation concerns despite a gross profit margin of 80%. In contrast, ESTC, with a market cap of around $8.9B, also exhibits a bearish trend, experiencing a price drop of over 32%, and holds a C- rating from analysts, reflecting its struggles in profitability with a net income margin of -7.28%.
Investors focused on growth may prefer INFA, given its larger market cap and slightly better profit margins, while those prioritizing stability might opt for ESTC, which has a more active revenue generation despite recent losses. Both companies face risks related to competition and market dependence, which may affect their recovery.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Informatica Inc. and Elastic N.V. to enhance your investment decisions:
