Loop Capital has lowered its price target on Snowflake Inc . (NYSE: NYSE:SNOW) to $185 from $225 while maintaining a Buy rating on the company's stock.
The adjustment comes as Snowflake is set to report its second-quarter fiscal year 2025 results after the market closes on Wednesday.
The firm anticipates that Snowflake will surpass the high-end product revenue and non-GAAP EPS estimates of $809 million and $0.16, respectively.
The analyst from Loop Capital believes the upcoming quarterly results will not be a major catalyst but expects the performance to be solid enough to support stock ownership into the quarter.
Identified upside factors for the company include improved consumption trends, easing cloud optimization challenges, and a robust product cycle expected to increase workloads on the Snowflake platform.
Despite the positive outlook for the quarter, concerns have been raised due to a recent data breach incident, the shift of customers to Iceberg tables which may pose short-term growth obstacles, and the task ahead for the new CFO to address the threats posed by open table data formats.
The firm underscores the importance of the new CEO to alleviate investor concerns by demonstrating progress in several key areas.
These areas include sustaining high growth in the core data warehouse business, boosting customer adoption for building data apps on the platform and pivoting the company towards becoming a more comprehensive AI data solution for developers of AI and machine learning solutions.
In other recent news, Baird has lowered its price target for Snowflake shares to $165, citing weaker initial guidance and leadership transition, but maintains an Outperform rating. Citi also adjusted its price target for Snowflake shares to $200, while maintaining a Buy rating and expressing cautious optimism for the company's second fiscal quarter earnings.
Scotiabank has reiterated a Sector Outperform rating on Snowflake, with a price target of $195, highlighting the company's strong market position. TD Cowen has reduced its price target for Snowflake to $180, while maintaining a Buy rating, expressing optimism about the company's potential to exceed financial expectations.
Evercore ISI 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 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 Snowflake Inc. (NYSE:SNOW) prepares to release its second-quarter fiscal year 2025 results, investors and analysts alike are keeping a close eye on the company's financial health and market performance. According to real-time data from InvestingPro, Snowflake's market capitalization stands at $44.17 billion, reflecting the market's current valuation of the company. Despite not being profitable over the last twelve months, analysts predict that Snowflake will turn a profit this year, an optimistic sign for potential investors.
InvestingPro Tips highlight that Snowflake holds more cash than debt on its balance sheet and its liquid assets exceed short-term obligations, providing the company with a cushion to navigate economic uncertainties. However, the stock is trading at a high revenue valuation multiple (Price/Book LTM as of Q1 2025: 9.69), which means that it's priced at a premium compared to its book value. Additionally, Snowflake's stock has taken a significant hit over the last six months, with a -38.99% price total return, which could be a point of concern for investors looking for stability.
Loop Capital's revised price target of $185 aligns with the cautious optimism seen in the market, as the current price is hovering around $131.92. With additional InvestingPro Tips available, investors can gain deeper insights into Snowflake's financial position and market trends. For those considering a stake in Snowflake, these metrics and expert tips could be instrumental in making an informed decision.
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