In the rapidly evolving software industry, two companies stand out for their innovative approaches: Snowflake Inc. and Elastic N.V. Both firms operate within the Software – Application sector, yet they target different aspects of data management and analytics. Snowflake focuses on providing cloud-based solutions for data consolidation and insights, while Elastic specializes in search and analysis technologies. In this article, I will explore their strategies and performance to help you determine which company might be the more compelling investment opportunity.
Table of contents
Company Overview
Snowflake Inc. Overview
Snowflake Inc. is a leading cloud-based data platform provider, specializing in enabling organizations to consolidate their data into a single source of truth. Founded in 2012 and headquartered in Bozeman, Montana, the company aims to empower businesses to derive meaningful insights, build data-driven applications, and facilitate data sharing across various industries. With a robust market capitalization of approximately $76.4B, Snowflake has established itself as a key player in the software application sector, particularly in data management and analytics. The company’s innovative approach allows clients to harness the power of data in a secure and scalable environment, making it a go-to solution for enterprises seeking efficiency and operational excellence.
Elastic N.V. Overview
Elastic N.V., established in 2012 and based in Mountain View, California, focuses on delivering powerful technology solutions that cater to multi-cloud environments. The company is best known for its Elastic Stack, which includes products like Elasticsearch for real-time search and analytics, Kibana for data visualization, and Logstash for data processing. With a market capitalization of approximately $7.85B, Elastic positions itself as a go-to resource for organizations looking to manage and analyze diverse data types effectively. The company’s commitment to innovation and customer-centric solutions has enabled it to carve out a significant niche within the software application industry, particularly in search and data analysis.
Key similarities and differences
Both Snowflake and Elastic operate in the software application industry, focusing on data management and analytics. However, Snowflake primarily emphasizes cloud data warehousing and seamless data integration, while Elastic specializes in real-time search and analysis through its Elastic Stack. Their differing approaches cater to varied aspects of data utilization, appealing to a wide range of enterprise needs.
Income Statement Comparison
The following table provides a comparison of the income statements for Snowflake Inc. and Elastic N.V. for their most recent fiscal years, reflecting key financial metrics.
| Metric | Snowflake Inc. (SNOW) | Elastic N.V. (ESTC) |
|---|---|---|
| Market Cap | 76.4B | 7.9B |
| Revenue | 3.63B | 1.48B |
| EBITDA | -1.10B | 6.05M |
| EBIT | -1.28B | -6.26M |
| Net Income | -1.29B | -108.11M |
| EPS | -3.86 | -1.04 |
| Fiscal Year | 2025 | 2025 |
Interpretation of Income Statement
In 2025, Snowflake faced significant challenges, with revenue at 3.63B and a net loss of 1.29B, indicating ongoing investment pressures. In contrast, Elastic showed improvement, generating 1.48B in revenue and narrowing its net loss to 108.11M. Despite both companies reporting negative earnings, Elastic’s EBITDA of 6.05M suggests operational stability. Snowflake’s declining margins highlight the need for effective cost management, while Elastic’s revenue growth reflects a potentially better market acceptance of its offerings. Overall, both companies present investment risks alongside opportunities for recovery and growth.
Financial Ratios Comparison
In this section, I present a comparative analysis of key financial ratios for Snowflake Inc. (SNOW) and Elastic N.V. (ESTC) based on the most recent available data.
| Metric | Snowflake Inc. (SNOW) | Elastic N.V. (ESTC) |
|---|---|---|
| ROE | -42.86% | -11.66% |
| ROIC | -25.32% | -11.80% |
| P/E | -46.97 | -82.65 |
| P/B | 20.13 | 9.64 |
| Current Ratio | 1.75 | 1.92 |
| Quick Ratio | 1.75 | 1.92 |
| D/E | 0.90 | 0.64 |
| Debt-to-Assets | 29.72% | 22.95% |
| Interest Coverage | -527.73 | -2.17 |
| Asset Turnover | 0.40 | 0.57 |
| Fixed Asset Turnover | 5.53 | 51.28 |
| Payout Ratio | 0% | 0% |
| Dividend Yield | 0% | 0% |
Interpretation of Financial Ratios
Both companies exhibit negative returns on equity (ROE) and invested capital (ROIC), indicating challenges in profitability. Snowflake’s high P/B ratio suggests overvaluation relative to its book value, while Elastic’s lower multiples present a more attractive valuation. The current and quick ratios for both firms indicate adequate short-term liquidity. However, the negative interest coverage ratios highlight significant concerns regarding debt servicing. Investors should approach these stocks with caution, particularly given their current financial struggles.
Dividend and Shareholder Returns
Both Snowflake Inc. (SNOW) and Elastic N.V. (ESTC) do not currently pay dividends, which is indicative of their focus on growth and reinvestment strategies. This aligns with their high-growth phases, where prioritizing Research & Development and acquisitions is crucial. While neither company offers dividends, they engage in share buybacks, which can enhance shareholder value over time. However, the absence of dividends suggests that investors should carefully consider whether this approach will support sustainable long-term value creation.
Strategic Positioning
In the competitive landscape of the software application industry, Snowflake Inc. (SNOW) commands a significant market share with its innovative cloud-based data platform, boasting a market cap of $76.4B. Elastic N.V. (ESTC), with a market cap of $7.9B, also plays a crucial role with its Elastic Stack, which is essential for data analysis and visualization. Both companies face competitive pressure from emerging technologies and established players, making it vital for them to continually innovate and adapt to market demands.
Stock Comparison
In this section, I will analyze the weekly stock price movements and trading dynamics of Snowflake Inc. (SNOW) and Elastic N.V. (ESTC) over the past year, highlighting key price changes and overall market trends.
Trend Analysis
Snowflake Inc. (SNOW) Over the past year, SNOW has experienced a price increase of 19.32%, indicating a bullish trend. The stock has displayed notable acceleration in its price movement, with a standard deviation of 42.4, suggesting a higher level of volatility. The highest price reached was $274.88, while the lowest was $108.56. Recently, however, the stock has shown a minor decline of -0.98% from September 21, 2025, to December 7, 2025, with a trend slope of 1.27.
Elastic N.V. (ESTC) In contrast, ESTC has faced a significant decline of -33.45% over the past year, reflecting a bearish trend. The stock’s movement is characterized by a deceleration and a standard deviation of 15.03, indicating lower volatility compared to SNOW. The highest price for ESTC was $130.39, while the lowest was $70.04. Recently, from September 21, 2025, to December 7, 2025, ESTC has further declined by -16.46%, with a trend slope of -1.26.
In summary, while SNOW is showing signs of resilience and upward momentum, ESTC is currently struggling with significant downward pressure and diminished investor confidence.
Analyst Opinions
Recent analyst recommendations for both Snowflake Inc. (SNOW) and Elastic N.V. (ESTC) are notably cautious, with both receiving a rating of C-. Analysts suggest a hold position, citing concerns over return on equity and overall financial metrics. The consensus leans toward a cautious approach rather than outright buying, as evidenced by the low overall scores in key areas such as debt-to-equity and price-to-earnings. Given these evaluations, I recommend closely monitoring these stocks before making any decisions.
Stock Grades
In this section, I present the latest stock ratings for Snowflake Inc. and Elastic N.V., based on credible grading sources.
Snowflake Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Stifel | maintain | Buy | 2025-12-04 |
| DA Davidson | maintain | Buy | 2025-12-04 |
| Morgan Stanley | maintain | Overweight | 2025-12-04 |
| Deutsche Bank | maintain | Buy | 2025-12-04 |
| Cantor Fitzgerald | maintain | Overweight | 2025-12-04 |
| Baird | maintain | Outperform | 2025-12-04 |
| BTIG | maintain | Buy | 2025-12-04 |
| Keybanc | maintain | Overweight | 2025-12-04 |
| Scotiabank | maintain | Sector Outperform | 2025-12-04 |
| Rosenblatt | maintain | Buy | 2025-12-04 |
Elastic N.V. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | maintain | Buy | 2025-11-24 |
| Cantor Fitzgerald | maintain | Neutral | 2025-11-21 |
| Morgan Stanley | maintain | Overweight | 2025-11-21 |
| Stifel | maintain | Buy | 2025-11-21 |
| DA Davidson | maintain | Neutral | 2025-11-21 |
| UBS | maintain | Buy | 2025-11-21 |
| Rosenblatt | maintain | Buy | 2025-11-21 |
| JP Morgan | maintain | Overweight | 2025-11-21 |
| Guggenheim | maintain | Buy | 2025-11-21 |
| B of A Securities | maintain | Neutral | 2025-11-21 |
Overall, both Snowflake Inc. and Elastic N.V. are maintaining positive ratings, with a strong presence of “Buy” and “Overweight” grades indicating favorable sentiment among analysts.
Target Prices
The current consensus among analysts indicates optimistic target prices for both Snowflake Inc. and Elastic N.V.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Snowflake Inc. | 325 | 230 | 282.25 |
| Elastic N.V. | 134 | 76 | 108 |
For Snowflake Inc., the consensus target price of 282.25 suggests a potential upside from the current price of 228.36. Meanwhile, Elastic N.V.’s consensus target of 108 indicates a positive outlook compared to its current price of 74.50. Both companies appear to have favorable expectations from analysts.
Strengths and Weaknesses
The table below outlines the strengths and weaknesses of two prominent companies in the technology sector, Snowflake Inc. (SNOW) and Elastic N.V. (ESTC).
| Criterion | Snowflake Inc. (SNOW) | Elastic N.V. (ESTC) |
|---|---|---|
| Diversification | Limited (focus on data platform) | Moderate (multi-cloud solutions) |
| Profitability | Negative margins (-35.45%) | Positive gross margin (74.39%) |
| Innovation | High (cutting-edge data solutions) | High (Elastic Stack technology) |
| Global presence | Strong (international reach) | Moderate (growing in multiple regions) |
| Market Share | Growing (leading in data platform) | Niche (specific search solutions) |
| Debt level | Moderate (debt-to-equity 0.90) | Moderate (debt-to-equity 0.64) |
Key Takeaways: Snowflake excels in innovation and profitability is improving, while Elastic shows strong gross margins. Both companies have moderate debt levels, indicating they are managing financial risk effectively.
Risk Analysis
In the table below, I outline the key risks associated with Snowflake Inc. (SNOW) and Elastic N.V. (ESTC).
| Metric | Snowflake Inc. (SNOW) | Elastic N.V. (ESTC) |
|---|---|---|
| Market Risk | High | Moderate |
| Regulatory Risk | Moderate | High |
| Operational Risk | High | Moderate |
| Environmental Risk | Low | Moderate |
| Geopolitical Risk | Moderate | High |
Both companies face significant market and operational risks, especially in a highly competitive tech sector. Recent regulatory scrutiny in the tech industry could impact their growth trajectories, underscoring the need for cautious investment strategies.
Which one to choose?
When comparing Snowflake Inc. (SNOW) and Elastic N.V. (ESTC), both companies present challenges and opportunities for investors. Snowflake has shown a gross profit margin of 66.5% but operates at a significant loss, with a C- rating and a bearish stock trend. Meanwhile, Elastic, while also rated C-, reported a higher gross profit margin of 74.4% and has recently turned profitable, albeit with a declining stock trend.
SNOW’s market cap stands at $60.4B, while ESTC is valued at $8.9B, indicating a significant difference in size and market presence. Analysts generally express caution toward both, with Snowflake’s current ratios suggesting liquidity issues which may impact future growth.
Investors focused on growth and willing to embrace higher risks might prefer Snowflake, while those prioritizing stability with recent profitability may lean toward Elastic.
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 Snowflake Inc. and Elastic N.V. to enhance your investment decisions:
