Is Elastic NV overvalued or undervalued?

As of 27 February 2025, the valuation grade for Elastic NV has moved from expensive to risky, indicating a significant shift in investor sentiment. The company is currently deemed overvalued based on its financial metrics. Key ratios highlight this concern: the Price to Book Value stands at 9.73, while the EV to Sales ratio is at 5.53, both suggesting a high valuation relative to underlying fundamentals. Additionally, the company's ROCE is a troubling -51.46%, further emphasizing its financial challenges.
In comparison to its peers, Elastic NV's P/E ratio is not applicable due to its loss-making status, while Nutanix, Inc. and Twilio, Inc. also reflect risky valuations with P/E ratios of 836.07 and -1297.51, respectively. However, F5, Inc. and DocuSign, Inc. present more attractive valuations with P/E ratios of 26.22 and 13.66, respectively. Notably, Elastic NV's stock has underperformed against the S&P 500 over the past year, with a decline of 24.55% compared to the index's gain of 10.26%, reinforcing the view that the company is currently overvalued.