Citi has maintained its Buy rating on shares of Snowflake Inc . (NYSE: NYSE:SNOW) but lowered its price target from $236.00 to $200.00. The adjustment comes as the firm expresses a cautious optimism ahead of the company's second fiscal quarter earnings.
Citi's analysis suggests there is potential for an upside in the numbers and possibly a significant raise for the full year.
The firm's checks both during and after the quarter indicated positive trends in customer migrations and the adoption of Snowflake's latest products, such as Cortex.
Furthermore, there appeared to be minimal impact from Iceberg headwinds. Citi believes that these factors, alongside two quarters of accelerating bookings, could lead to at least a stabilization in Snowflake's top-line growth.
Citi also noted that investor sentiment towards Snowflake remains cautious. However, if the upcoming earnings report provides clear evidence of benefits from the general availability of artificial intelligence (GenAI) due to the accelerated new product cycle under CEO Frank Slootman, the stock could see favorable movement.
The firm emphasized the attractive risk/reward profile for Snowflake, with multiple tailwinds that could potentially outweigh any headwinds, including security credential incidents reported by customers within the quarter.
Meanwhile, Scotiabank maintains a Sector Outperform rating on Snowflake, with a price target of $195, highlighting the company's strong market position and potential for slight outperformance in product revenue for the second fiscal quarter.
TD Cowen has cut the price target for Snowflake to $180, while maintaining a buy rating, expressing optimism about the company's potential to exceed financial expectations. Evercore ISI has trimmed its price target to $170, expecting a modest potential increase to the F3Q estimates, while KeyBanc Capital Markets maintains an Overweight rating, anticipating a robust earnings report for the second fiscal quarter.
BofA Securities has reduced its price target for Snowflake to $160, maintaining a Neutral stance, awaiting further evidence of sustained consumption recovery and success with new products.
InvestingPro Insights
As investors and analysts await Snowflake Inc.'s (NYSE: SNOW) upcoming earnings report, real-time data from InvestingPro provides a deeper look into the company's financial health and market performance. Snowflake's market capitalization stands at $44.0 billion, reflecting its significant presence in the cloud computing space. Despite not being profitable over the last twelve months, analysts are optimistic, predicting the company will turn profitable this year, an indication of potential growth on the horizon.
InvestingPro Tips highlight that Snowflake holds more cash than debt on its balance sheet and its liquid assets exceed short-term obligations, suggesting a stable financial position. However, the company's trading at a high revenue valuation multiple and a Price/Book multiple of 9.65, signaling a premium market valuation. Over the last six months, the stock has experienced a substantial decline of 40.29%, yet there's a recent uptick with a 3.43% price total return in the last week, indicating some investor confidence as the earnings date approaches.
For those considering an investment in Snowflake, additional insights are available. InvestingPro offers a total of 8 tips on Snowflake, which can be accessed for further detailed analysis and investment considerations.
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