Software leader Snowflake, Monday's pick for IBD 50 Growth Stocks To Watch, is rapidly nearing a buy point, as the company's profits more than doubled in the latest quarter. That makes SNOW one of the best stocks to buy and watch in today's stock market.
Snowflake sells data analytics and management software that runs on cloud computing platforms. The company is evolving into a cloud data-management platform.
The company offers Snowflake Cortex, a new fully-managed service that provides — among other things — AI models.
On Nov. 29, the company said revenue climbed 32% to $734.2 million last quarter. Analysts had expected Q3 revenue of $713.8 million. On an adjusted basis, Snowflake earnings were 25 cents per share, up 127%. Analysts expected Snowflake to report adjusted profit of 16 cents per share.
Analysts project the company's earnings will surge 216% this fiscal year, to 79 cents per share, with growth of 39% seen in fiscal 2025, according to FactSet.
Despite those recent earnings gains, the company doesn't yet boast a long-term track record of profitability, so SNOW stock has an Earnings Per Share Rating of 82 out of a best-possible 99, according to IBD Stock Checkup. This rating takes into account earnings growth and profit stability over the past three years. The two most recent quarters are weighted more heavily.
SNOW stock has a 94 out of 99 IBD Composite Rating after a tremendous stock price move since late October. That makes it one of the best stocks to buy and watch in the ongoing stock market rally.
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SNOW Stock Nears Buy Point
Snowflake stock is forming a cup base with a buy point of 193.94, according to IBD MarketSmith chart analysis. SNOW stock rose more than 2% midday Monday, trading about 2% away from its newest buy point. Meanwhile, an earlier entry is also in play at 192.66, at Thursday's high price.
A key technical metric to watch is the relative strength line. SNOW stock's RS line rallied sharply in recent weeks, a bullish sign of market outperformance. The RS line reached its highest level since July. Ideally, the RS line should hit a new high on the breakout day or shortly thereafter to confirm the stock as a market leader.
With the stock market outlook in a confirmed uptrend, investors have the opportunity to raise market exposure through buying stocks making strong breakouts. And Snowflake appears to be one of the best stocks to buy and watch Monday.
Best Stocks To Buy And Watch
Three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Royal Caribbean | 112.95 | Cup base | |
| Lululemon Athletica | 406.94 | Flat base | |
| Microsoft | 366.78 | Cup base |
Source: IBD Data As Of Dec. 4, 2023
Follow Scott Lehtonen on X/Twitter at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.
