ESTC WACC - Weighted Average Cost of Capital
The WACC of Elastic NV (ESTC) is 8.9%.
| Range | Selected | |
| Cost of equity | 7.7% - 10.4% | 9.05% |
| Tax rate | 5.0% - 7.4% | 6.2% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 7.6% - 10.2% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.83 | 0.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 10.4% |
| Tax rate | 5.0% | 7.4% |
| Debt/Equity ratio | 0.06 | 0.06 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 7.6% | 10.2% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ESTC | Elastic NV | 0.06 | 1.72 | 1.63 |
| APPS | Digital Turbine Inc | 0.88 | 1.33 | 0.73 |
| AVLR | Avalara Inc | 1.73 | 0.98 | 0.37 |
| BILL | Bill.com Holdings Inc | 0.2 | 1.6 | 1.35 |
| BL | Blackline Inc | 0.27 | 0.85 | 0.68 |
| DBX | Dropbox Inc | 0.32 | 0.88 | 0.68 |
| FIVN | Five9 Inc | 0.59 | 1.57 | 1.01 |
| GWRE | Guidewire Software Inc | 0.02 | 0.88 | 0.86 |
| PEGA | Pegasystems Inc | 0.06 | 1.28 | 1.21 |
| GOJXN.AS | GeoJunxion NV | 0.14 | -0.09 | -0.08 |
| Low | High | |
| Unlevered beta | 0.71 | 0.92 |
| Relevered beta | 0.75 | 0.99 |
| Adjusted relevered beta | 0.83 | 0.99 |
ESTC's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for ESTC:
cost_of_equity (9.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.83) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.