Snowflake Beats on Earnings, Forecasts Come in Short, Stock Tanks

SNOW Beats Earnings

Snowflake, the Data Cloud company, reported financial results for its fourth quarter and full-year of fiscal 2023. The company’s product revenue for the quarter was $555.3 million, representing 54% YoY growth. Its remaining performance obligations were $3.7 billion, representing 38% YoY growth. The net revenue retention rate was 158% as of January 31, 2023. The company’s net income for Q4 was -$239.8 million, compared to -$406.7 million for the same period last year. Snowflake now has 7,828 total customers, and 330 customers with trailing 12-month product revenue greater than $1 million. The company authorized a $2.0 billion stock repurchase program. Snowflake’s Chairman and CEO, Frank Slootman, said the company is on track for its $10 billion product revenue goal in fiscal 2029.

Stock Price Action

The Snowflake earnings report showed that the revenue outlook that was provided by the company was lower than what analysts had expected. This news caused a negative reaction in the stock, and SNOW’s stock price dropped over 7 percent in after hours trading as a result.

When a company’s earnings report comes in lower than expected, it can lead to a decrease in investor confidence in the company’s future prospects. This can result in a decline in the stock price as investors sell their shares, and in some cases, can trigger a broader sell-off in the market. In Snowflake’s case, the lower than expected revenue outlook was seen as a negative signal for the company’s future growth, which contributed to the drop in the stock price.

SNOW Stock Forecast Analysis

30 analysts have given an average target price of USD 193.47 for Snowflake Inc. over the next 12 months. This indicates that the analysts are bullish about the future prospects of the company and expect its stock price to increase in the coming year. Additionally, the average analyst rating for Snowflake Inc. is “Strong Buy,” which further reinforces the positive sentiment around the stock.

 Stock Target Advisor, which gives Snowflake Inc.’s stock analysis a “Slightly Bearish” rating. This rating is based on 3 positive signals and 7 negative signals, suggesting that there may be some potential risks associated with investing in Snowflake Inc.’s stock.

As of the last closing, the stock was trading at USD 154.38, which is lower than the average target price forecasted by the analysts. The stock has seen a small increase of +2.06% over the past week, but it has experienced a decline of -3.13% over the past month and a significant drop of -41.89% over the last year.

 

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