Piper Sandler analyst Brent Bracelin maintains an Overweight rating and a price target of $194 for Snowflake Inc (SNOW). While the revised FY24 product revenue growth of 34% was slightly lower than the analyst’s 40% estimate and Street expectations, he remains optimistic about Snowflake’s ability to scale its operations and achieve over $10 billion in revenue over the long term. Bracelin highlighted the company’s solid execution on free cash flow metrics as an indication of its potential for longer-term profitability.
Needham analyst Mike Cikos reiterates a Buy rating and a price target of $180 for Snowflake. He notes the company’s recent challenges, including weaker trend from larger Enterprise customers, which led to the downward revision of FY24 product revenue growth and operating margins. However, Cikos points out that larger customers adjusting their retention policy or shifting their data storage location can reduce storage costs and speed up queries, benefiting the company in the long run.
Oppenheimer analyst Ittai Kidron maintains an Outperform rating and a price target of $190 for Snowflake. He acknowledges the product revenue guidance for 2QFY24 was below the Street estimate, but emphasizes the potential of innovations around artificial intelligence, which require large data requirements and can result in an uplift for the company.
Morgan Stanley analyst Keith Weiss reiterates an Overweight rating and a price target of $215 for Snowflake. While he is disappointed with the slower pace of growth expected in FY24, Weiss grows more confident in the company’s competitive positioning for a market opportunity estimated to be worth $248 billion. He notes Snowflake’s strong positioning for this opportunity, as new product launches gain traction, data ecosystems begin to form, and the benefits of Generative AI begin to accrue. Weiss also highlights a 91% YoY increase in data science, machine learning, and AI use cases on the Snowflake platform.
Raymond James analyst Simon Leopold reiterates an Outperform rating and a price target of $170 for Snowflake. While the company’s consumption model may be more vulnerable to macro headwinds leading to lower customer consumption rates, he expects growth to bottom out this year and re-accelerate in FY25/CY24.
Despite the short-term challenges, these analysts believe the long-term potential of Snowflake is too good to ignore.
Price Action: SNOW shares traded lower by 17.90% at $145.46 on the last check Thursday.
