Latest news with #Snowpark
Business Insider
10 hours ago
- Business
- Business Insider
Snowflake Stock (SNOW) Continues to See Buy Ratings Pour In from Top Analysts
Analysts appear to have a positive view of software stock Snowflake (SNOW), as they see strong growth potential ahead. Indeed, five-star Jefferies analyst Brent Thill recently raised his price target on the stock from $220 to $250 and kept a Buy rating. While Snowflake didn't make any major announcements at its recent user conference, Jefferies noted that the company's quick innovation is driving excitement. One key example is Snowflake Intelligence, which is an early-stage product that is 'generating strong buzz' and could help the company expand its market presence. Confident Investing Starts Here: Separately, five-star analyst William Power from Baird also reiterated a Buy rating on Snowflake and pointed to several reasons for his bullish view. To begin with, the company's new Cortex/ AI product is expected to drive future growth, and Snowflake's focus on improving data access and analytics gives it an edge in today's data-driven world. At the same time, Snowflake is expanding its distribution network and strengthening its sales strategies. Another growth driver is the Gen2 Warehouses offering, which provides faster computing and better pricing. In addition, five-star Stifel Nicolaus analyst Brad Reback shared this optimism and maintained a Buy rating after the user conference. Reback noted that customers and partners are increasingly choosing Snowflake over competitors like Databricks for data science, engineering, and machine learning projects. Customers also gave very positive feedback on Snowpark, and many are excited about Openflow, which is a new tool that could remove the need for older middleware ETL platforms. Finally, Snowflake continues to lead in its core SQL business while gaining traction in newer tech. Is SNOW a Good Buy Right Now? Overall, analysts have a Strong Buy consensus rating on SNOW stock based on 34 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SNOW price target of $226.74 per share implies 7.6% upside potential.
Yahoo
29-05-2025
- Business
- Yahoo
Snowflake (SNOW) AI-Powered Hot Streak Leaves Its Valuation Melting
Snowflake (SNOW) continues to impress with its AI-driven strategy, delivering a strong Q1 FY2026 that included a 26% year-over-year increase in product revenue and a robust $6.7 billion pipeline of contracted future business. The company's transformation into a leading AI Data Cloud platform is gaining traction, fueled by high-profile partnerships with OpenAI and Anthropic—strategic moves that hint at even broader collaborations ahead. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter The vision is compelling, and the momentum is undeniable. However, from a valuation perspective, caution is warranted. Persistent net losses and substantial stock-based compensation raise concerns about the sustainability of the current share price, which already reflects much of the expected growth. While the long-term story is exciting, I'm maintaining a Hold rating—enthusiastic about the potential, but mindful of the financial fundamentals that still need to catch up. My Hold rating remains intact after taking a closer look under the hood. Snowflake boasts a compelling business model that continues to resonate with large enterprises, embedding itself deeper into operations by breaking down data silos, streamlining processes, and delivering value from a unified, accessible platform. The platform itself is rapidly evolving. It now features AI agent capabilities, developer tools via Snowpark, and advanced data science functionality through Cortex. Recent high-profile partnerships with OpenAI and Anthropic further bolster Snowflake's credibility in the AI space. Management is clearly focused on expanding its developer ecosystem, aiming to empower businesses to deploy their own LLMs and AI agents within a secure, governed environment, advancing its vision of becoming the definitive 'AI Data Cloud.' That said, the fundamentals raise some concerns. In Q1, Snowflake reported a net loss of $430 million and fell short of expectations on adjusted free cash flow, posting $206 million. These financial pressures, despite strong topline growth, signal that management still faces significant challenges in driving sustainable profitability. While these figures aren't alarming for Snowflake's long-term outlook, the stagnation in revenue retention rates indicates that, despite steady growth and operational progress, the company faces mounting pressure. Competitors with stronger balance sheets and deeper resources are intensifying the challenge. Capital expenditures have climbed, largely due to Snowflake's investments in AI infrastructure, its new headquarters, and an increasingly complex product suite. Though revenue growth remains robust, the company's profitability has yet to reflect the efficiencies being pursued. Notably, stock-based compensation exceeded $400 million in just one quarter, continuing to dilute shareholders and pushing out the timeline for achieving sustainable earnings. For prospective investors, this combination of uncertainty, elevated spending, and the need to raise additional capital adds a layer of risk that's difficult to ignore. Snowflake now operates in a significantly more competitive landscape. Its early lead in cloud-native data warehousing is being eroded by deeply integrated and widely adopted alternatives such as Microsoft Fabric, Amazon Redshift, Google BigQuery, and Databricks. Microsoft, in particular, is leveraging its expansive Azure ecosystem to bundle generative AI capabilities, creating a powerful value proposition that places considerable pressure on standalone platforms like Snowflake. Meanwhile, Databricks has continued to gain traction, securing significant funding and rapidly expanding its user base. Competing head-to-head with tech giants may prove challenging for a company like Snowflake, which has yet to reach profitability. In this context, strategic partnerships appear to be a prudent path forward. Snowflake's alliances with Anthropic, OpenAI, Nvidia, and others are designed to strengthen its competitive position and expand its capabilities, but such partnerships are rarely straightforward. While these collaborations enhance the platform's appeal and long-term potential, they depend on seamless integration and sustained adoption to translate into meaningful revenue. At this stage, those outcomes remain more aspirational than material. Consequently, my investment thesis rests on the view that intensifying competition could outpace Snowflake's monetization efforts unless management can significantly accelerate execution. Snowflake reported total revenue of $1.04 billion for Q1 FY2026, exceeding analyst expectations. Remaining performance obligations increased to $6.7 billion—a 34% year-over-year rise—reflecting strong customer commitment and continued platform adoption. The company added 451 net new customers during the quarter, bringing its total to 606 customers generating over $1 million in trailing 12-month product revenue. That said, the pace of growth has clearly moderated compared to previous years, signaling a maturing business facing more measured expansion. Despite solid growth in remaining performance obligations, profitability remains a challenge for Snowflake. GAAP losses persist, and although operating cash flow was positive, adjusted free cash flow margins fell short of expectations. The company is guiding for 25% free cash flow margins for the full year, but ongoing capital expenditures and heavy investment in AI initiatives may put downward pressure on that target. Snowflake is currently trading at more than 18 times forward revenue, significantly above the industry average. Based on my discounted cash flow analysis—assuming a 22% compound annual revenue growth rate through FY2030, a 20% long-term free cash flow margin, and an 8.5% weighted average cost of capital—the stock's fair value is approximately $210 per share, indicating it is close to fully valued. In a more optimistic scenario, with a 25% revenue CAGR and 25% FCF margin, the valuation could reach around $235. Conversely, under more conservative assumptions, the fair value drops to roughly $180 per share. The analyst community maintains a generally positive yet cautious outlook on the stock. Among 40 analysts covering Snowflake, 33 are bullish, while seven are bearish. Not a single analyst is bearish on SNOW stock. SNOW's average stock price target stands at $220.54, indicating almost 7% upside potential over the coming twelve months. Given the stock is trading close to consensus targets, any unexpected slowdown in revenue growth or customer acquisition could trigger downward pressure on the share price. In my view, Snowflake stands out as one of the most strategically positioned enterprise platforms in the rapidly evolving AI sector. Its technology is robust, the vision compelling, and partnerships with leading tech companies lend significant credibility. However, much of this potential appears to be already reflected in the current valuation, while the financial fundamentals have yet to fully catch up. Strategic partnerships and innovation can only go so far when margins are under pressure and competition is intensifying. For these reasons, I maintain a Hold rating. Snowflake could merit a Buy rating in the future, but only once it demonstrates a clear path to profitability and resilience amid a highly competitive market. At present, it remains a story to watch rather than chase. Investors should closely monitor capital expenditures, customer growth, and the tangible impact of AI-driven demand on revenue. Until the financials improve, I believe caution is not only prudent but essential. Disclaimer & DisclosureReport an Issue
Yahoo
26-05-2025
- Business
- Yahoo
Oppenheimer Maintains Outperform Rating on Snowflake (SNOW), Lifts PT
On Thursday, Oppenheimer raised its price target on Snowflake Inc. (NYSE:SNOW) to $225 from $210, while maintaining an Outperform rating on the shares. The firm noted that Snowflake delivered strong FQ1 2026 results due to broad-based demand and consistent consumption trends. A software engineer at work, surrounded by a wall of computer monitors connected to a 'Data Cloud' platform. The company reported total revenue of $1 billion for the quarter, which was up 26% year-over-year. Product revenue specifically reached $996.8 million and also represented a 26% year-over-year increase. Snowflake now serves 606 customers with trailing 12-month product revenue greater than $1 million, a 27% year-over-year increase, and has 754 Forbes Global 2000 customers, which reflects a 4% year-over-year growth. Sridhar Ramaswamy, CEO of Snowflake, commented on the results, stating that the company delivered 'another strong quarter.' Oppenheimer also highlighted better-than-expected activity in Snowpark and Dynamic Tables, along with robust AI adoption, as indicators that newer products are resonating well with customers. The firm is bullish on Snowflake and considers it a top pick. Oppenheimer anticipates potential upside, particularly if macroeconomic conditions remain stable. Snowflake Inc. (NYSE:SNOW) provides a cloud-based data platform for various organizations globally. While we acknowledge the potential of SNOW to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SNOW and that has 100x upside potential, check out our report about the cheapest AI stock. READ NEXT: and . Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-05-2025
- Business
- Yahoo
Snowflake's (SNOW) Toppy Valuation Braces for Earnings Day of Reckoning
Market expectations are sky-high for Snowflake (SNOW) going into its quarterly earnings announcement tomorrow. The stock has posted a robust 41% gain in the past six months, but now comes a time of reckoning for the stock that has promised so much and delivered. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter Market analysts expect SNOW to announce boosted earnings per share of $0.21, up ~50% year-over-year. The rather lofty earnings expectations are equally matched by revenues. Analysts are anticipating news of SNOW's revenues rising 18% to break the $1 billion barrier. Can it continue on its merry way without hiccups of any sort? The answer, it seems, is maybe. The data cloud titan benefits from accelerating cloud migrations and surging artificial intelligence (AI) interest. The upcoming earnings report will be a critical validator for recent stock gains. However, Snowflake's valuation should be a cause for concern for investors, as less-than-perfect performance could drive its stock back to earth. This makes me neutral on SNOW, at least for the time being. Ultimately, I think there is a golden nugget here, but now may not be the time to grab hold of it. Snowflake has two growth engines: cloud migration and AI data cloud. The former comes when enterprises are aggressively modernizing their data infrastructure. Snowflake goes out of its way to make the transition as easy as possible with tools like SnowConvert. This tool is freely available and is used to accelerate migrations from systems like Teradata and Oracle (ORCL), which are key competitors of Snowflake. AI is undergoing a transition of its own. Enterprises are gradually adopting AI solutions, and they need a cloud to store, process, and build AI models directly on their data. Snowflake offers multiple products in this vein. Snowpark, for instance, allows developers to build data pipelines and machine learning models within Snowflake. The company aims to become an easy-to-use, comprehensive platform where companies can consolidate their data and run several workloads. It's no surprise that Snowflake commands a premium valuation. Its cloud-based products are highly scalable, capital-light, and generate strong recurring revenue—all characteristics that support high margins. As a result, the stock currently trades at a Price/Free Cash Flow ratio of 64.64, meaning investors are paying $64.64 for every $1 of expected annual free cash flow. For perspective, the broader market typically trades in the 15–25 range. However, software-as-a-service (SaaS) companies like Snowflake often justify higher multiples due to their ability to convert revenue into cash more efficiently than firms with physical product lines. In FY2025, Snowflake reported $3.5 billion in product revenue, reflecting 30% year-over-year growth. For the first quarter of fiscal 2026, the company has guided revenue between $955 million and $960 million, representing 21% to 22% growth. However, several factors could challenge Snowflake's ability to sustain this pace. While its consumption-based, pay-as-you-go model offers flexibility to customers, it can introduce revenue volatility, especially if clients scale back usage amid cost-cutting efforts or uncertain macroeconomic conditions. Additionally, Snowflake faces stiff competition from cloud hyperscalers like Amazon (AMZN), Alphabet (GOOGL), Microsoft (MSFT), and Databricks. While its multi-cloud, cloud-agnostic architecture and ease of use provide differentiation, these advantages may not fully offset the scale and resources of larger rivals over time. Moreover, stock-based compensation remains a significant expense, weighing on GAAP profitability—a common concern in the SaaS sector. On Wall Street, SNOW earns a Strong Buy consensus rating based on 32 Buy, six Hold, and zero Sell ratings in the past three months. SNOW's average stock price target of $204.97 implies ~13% upside potential in the next 12 months. Analyst Derrick Wood from TD Cowen is bullish on SNOW. He has a Buy rating with a price target of $210. The analyst highlights Snowflake's new products, like Data Engineering and Cortex AI, and believes the company will be resilient to macroeconomic headwinds. Lastly, he cited the company's partnerships with OpenAI and Azure as enhancing its data-handling capabilities. Not everyone is as bullish, however. Steven Koenig from Macquarie rates SNOW a Hold in April with a price target of $160, implying ~12% downside. Notably, he points to risks from 'more aggressive FY26 product revenue guidance, competitors' AI positioning, and macro pressures on consumption.' In summary, while Snowflake is well-positioned in the rapidly expanding AI and cloud infrastructure space, it faces mounting competition from both established tech giants and emerging players. Its consumption-based revenue model, though flexible, remains vulnerable to macroeconomic pressures—particularly in cost-conscious environments. Given its premium valuation, currently at 64x times free cash flow, there is little margin for error. Any indication of slowing growth could prompt a sharp market reaction. In summary, while Snowflake is well-positioned in the rapidly expanding AI and cloud infrastructure space, it faces mounting competition from both established tech giants and emerging players. Its consumption-based revenue model, though flexible, remains vulnerable to macroeconomic pressures, particularly in cost-conscious environments. Given its premium valuation, currently at 64.64 times free cash flow, there is little margin for error. Any indication of slowing growth could prompt a sharp market reaction. Disclaimer & DisclosureReport an Issue Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
31-03-2025
- Business
- Yahoo
Why Snowflake (SNOW) Shares Are Plunging Today
Shares of data warehouse-as-a-service Snowflake (NYSE:SNOW) fell 5.2% in the morning session after anxiety and uncertainty rattled markets as the major stock indices pulled back in the morning session amid concerns about "reciprocal tariffs" to be announced later in the week. The planned tariffs, scheduled for April 2, 2025 (dubbed Liberation Day), were targeted at all countries where the United States had a trade deficit. Simply put, if a US trading partner imposed higher tariffs on American goods than the US did on theirs, the "reciprocal tariffs" would apply. The prospect of heightened trade tensions seemed to have stoked fears of stagflation (slower economic growth and elevated inflation) as the anticipated tariffs will likely raise input costs for businesses. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Snowflake? Access our full analysis report here, it's free. Snowflake's shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. The biggest move we wrote about over the last year was 4 months ago when the stock gained 32.4% on the news that the company reported a strong "beat and raise" quarter. It was encouraging to see Snowflake exceed analysts' revenue expectations with a net revenue retention rate (NRR) that didn't fall at all from the previous quarter. During the earnings call, Snowflake emphasized its commitment to simplifying data workflows and integrating AI capabilities, such as Snowflake Cortex. These initiatives drove competitive displacement and increased customer adoption. Additionally, new products like Snowpark are contributing to revenue growth. Snowpark was expected to account for roughly 3% of total product revenue. On the AI front, Snowflake reported over 1,000 generative AI use cases deployed in production, and 3,200 customers utilizing its platform for AI and machine learning applications. This is another aspect of the business with a strong potential to accelerate growth as customers recognize the value that AI adds to their operations. Moving to the bottom line, operating margin in the quarter beat, and combined with the top-line improvements and cost efficiencies, EPS easily surpassed analysts' estimates. Looking ahead, Q4 product revenue guidance was ahead of analysts' expectations, adding to the good news. For the full year, guidance for product revenue, gross margin, and operating margin were all raised. Overall, this was a very good quarter, a relief for a company that had shown some uneven earnings performance in the previous year. Snowflake is down 7.7% since the beginning of the year, and at $145.42 per share, it is trading 24.6% below its 52-week high of $192.78 from February 2025. Investors who bought $1,000 worth of Snowflake's shares at the IPO in September 2020 would now be looking at an investment worth $572.68. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Sign in to access your portfolio
