As the demand for data-driven insights and cloud-based solutions intensifies, companies providing these services are experiencing significant growth and investor interest. Snowflake Inc. (NYSE:SNOW), a leader in data cloud services, is at the forefront of this trend, capturing attention with its robust financial performance and strategic innovation.
Shares of Snowflake rallied in early trading on Thursday, after the company reported upbeat fiscal second-quarter results on Wednesday.
Here are some analyst takeaways.
- Citizens JMP Securities analyst Patrick Walravens reiterated a Market Outperform rating, while raising the price target from $260 to $283.
- KeyBanc Capital Markets analyst Eric Heath maintained an Overweight rating, while lifting the price target from $250 to $275.
- Wedbush analyst Daniel Ives reaffirmed an Outperform rating, while taking the price target higher from $230 to $250.
- JPMorgan analyst Mark Murphy reiterated an Overweight rating, while raising the price target from $225 to $255.
- Rosenblatt Securities analyst Blair Abernethy maintained a Buy rating, while lifting the price target from $210 to $250.
- Goldman Sachs analyst Kash Rangan reaffirmed a Buy rating, while taking the price target higher from $230 to $260.
- Needham analyst Mike Cikos reiterated a Buy rating, while raising the price target from $230 to $280.
- Cantor Fitzgerald analyst Thomas Blakey reaffirmed an Overweight rating, while lifting the price target from $242 to $275.
- BofA Securities analyst Brad Sills maintained a Buy rating, while raising the price target from $240 to $280.
Check out other analyst stock ratings.
Citizens JMP Securities: Snowflake reported strong quarterly results, with non-GAAP earnings of 35 cents per share, topping consensus of 27 cents per share, Walravens said in a note. The company's total revenues climbed 32% year-on-year to $1.14 billion, surpassing consensus of $1.09 billion, with product revenues of $1.09 billion beating expectations by around $52 million, he added.
Total remaining performance obligations (RPO) of $6.93 billion grew 33% year-on-year and 34% sequentially, the analyst stated. "Snowflake addresses a huge opportunity that is expected to more than double to $355B in 2029, from $170B in 2024," he further wrote.
KeyBanc Capital Markets: Snowflake's results highlighted "continued strength in core analytics as well as outperformance across all new products," Heath said. Crunchy contributed more than $5 million in the quarter, he added.
Net recurring revenues (NRR) rose 1 percentage point to 125%, driven by "migration activity among large existing customers," the analyst stated. "We continue to see Snowflake benefiting its data gravity, a strong pace of product innovation – expanding beyond core data warehouse, and enterprise’s focus on a combined data and AI strategy," he further wrote.
Wedbush: After reporting a quarterly beat, Snowflake raised its product revenue guidance for fiscal 2026 to around $4.395 billion, reflecting about 27% year-on-year growth, from its prior outlook of $4.350 billion, representing 25% growth, Ives said. The company "looks to drive further innovation across all parts of the business with data modernization for AI integrations still in the early innings of playing out in the space," he added.
Management raised their full-year operating margin guidance to around 9.0%, higher than Street expectations of 8.3%, the analyst stated. The company has the ability to "capitalize on the AI Revolution over the next 12-18 months as the company is well-positioned to benefit from the significant acceleration of AI use cases," he further wrote.
JPMorgan: Snowflake's quarterly product revenue growth of 31.5% year-on-year significantly exceeded Street expectations, Murphy said. Sequential product revenue growth of 9.4% was the highest since the third quarter of 2023, he added.
Dollar-based net revenue retention (DBNR) rose to 125% in the fiscal second quarter, which was the first time it has improved since more than three years ago in the fourth quarter of 2022, the analyst stated. "Overall, we are impressed with what is in our view a noticeably resurgent quarter as Snowflake takes its place among the small list of scaled public software companies capable of nudging growth above 30% in the current environment," he further wrote.
Rosenblatt Securities: While the core Snowflake offering remains the main driver of revenue performance, the company's "much improved product development release cadence since year is clearly resonating with its existing customers," Abernethy said.
The revenue outperformance in the second quarter was mainly driven by the faster-than-expected migration of workloads by large existing customers, the analyst stated. The Crunchy Data acquisition in June "added marginally to revenue in Q2," he further wrote.
Goldman Sachs: Snowflake reported its quarterly results "significantly" stronger than expected, Rangan said. The results not only reflected stabilization but also acceleration in product revenue growth, cRPO and NRR, he added.
The company hit a record high of net adds of customers with contracts higher than $1 million, the analyst stated. These results increase confidence in Snowflake's ability to scale revenues to over $10 billion, he stated.
Needham: The acceleration in product revenue growth reflects "the large market opportunity and continued runway Snowflake has in core Analytics,"Cikos said in note.
The company reported that 6,100 customers were using its AI/ML features on a weekly basis, up from around 5,200 in the prior quarter, the analyst stated. "We view large customer adoption as a leading indicator for Revenue," he further wrote.
Cantor Fitzgerald: The second-quarter revenue beat was the largest in absolute dollars as a public company, Blakey said. The beat, of $50 million was 4.9% above the high end of the guidance range, he added.
The strength was driven by Snowpark and AI/ML workloads, the analyst stated. "Management noted that it has made progress towards finding a new CFO to back-fill Mike Scarpeli," he further wrote.
BofA Securities: Snowflake reported "impressive" results, which were driven by momentum in the core analytics market as well as the company" "improved competitive position," Sill said. The 18% growth in new customer adds was likely driven by the "growing perception of Snowflake as a data platform for multiple types of workloads across analytics, data science, collaboration and AI," the analyst stated.
"We think this bodes well for larger expansion deals, as customers are starting with analytics, but plan to add other workloads addressing very large and growing addressable markets," he further wrote.
SNOW Price Action: Snowflake shares were up 18.66% at $237.78 at the time of publication on Thursday, up 50.93% since the start of the year. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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