Snowflake (SNOW, Financial) anticipates significant growth in its product revenue for the second quarter, estimating figures between $1.035 billion and $1.04 billion. This projection represents a year-over-year increase of 25%, showcasing strong performance for the data cloud company. Investors closely observing SNOW can look forward to insights from this robust growth as the company continues to enhance its market position.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 41 analysts, the average target price for Snowflake Inc (SNOW, Financial) is $206.88 with a high estimate of $440.00 and a low estimate of $115.00. The average target implies an upside of 15.50% from the current price of $179.12. More detailed estimate data can be found on the Snowflake Inc (SNOW) Forecast page.
Based on the consensus recommendation from 47 brokerage firms, Snowflake Inc's (SNOW, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Snowflake Inc (SNOW, Financial) in one year is $336.24, suggesting a upside of 87.72% from the current price of $179.12. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Snowflake Inc (SNOW) Summary page.
SNOW Key Business Developments
Release Date: February 26, 2025
- Q4 Product Revenue: $943 million, up 28% year over year.
- Remaining Performance Obligations: $6.9 billion, with 33% year-over-year growth.
- Net Revenue Retention Rate: 126%.
- Q4 Non-GAAP Operating Margin: 9%.
- Q4 Non-GAAP Adjusted Free Cash Flow Margin: 43%.
- FY25 Product Revenue: $3.5 billion, 30% year-over-year growth.
- FY25 Non-GAAP Product Gross Margin: 76%.
- FY25 Non-GAAP Operating Margin: 6%.
- FY25 Non-GAAP Adjusted Free Cash Flow Margin: 26%.
- Share Repurchase: $1.9 billion used to repurchase 14.8 million shares at $130.87 average price.
- Cash and Investments: $5.3 billion at year-end.
- Q1 FY26 Product Revenue Guidance: $955 million to $960 million, 21% to 22% year-over-year growth.
- FY26 Product Revenue Guidance: Approximately $4.28 billion, 24% year-over-year growth.
- FY26 Non-GAAP Product Gross Margin Guidance: Approximately 75%.
- FY26 Non-GAAP Operating Margin Guidance: 8%.
- FY26 Non-GAAP Adjusted Free Cash Flow Margin Guidance: 25%.
- FY26 Stock-Based Compensation as a Percent of Revenue: Expected to decrease to approximately 37% from 41%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Snowflake Inc (SNOW, Financial) reported a strong 28% year-over-year increase in Q4 product revenue, reaching $943 million.
- The company achieved a healthy net revenue retention rate of 126%, indicating strong customer loyalty and expansion.
- Snowflake Inc (SNOW) has seen significant growth in its data engineering business and strong adoption of open data formats like Apache Iceberg.
- The company introduced over 400 product capabilities in the past year, doubling the amount from the previous year, showcasing rapid innovation.
- Snowflake Inc (SNOW) has expanded its partnership with Microsoft, integrating OpenAI's models into its Cortex platform, enhancing its AI capabilities.
Negative Points
- Some large customers exhausted their commitments but did not renew, opting instead to purchase as they consume, which could indicate potential volatility in future revenue.
- The Q1 product revenue growth guidance of 21% to 22% represents a slowdown compared to previous quarters.
- Non-GAAP product gross margin is expected to slightly decrease to approximately 75% for FY26.
- The company faces ongoing challenges with performance improvements, which are a regular part of its business operations.
- Snowflake Inc (SNOW) is experiencing a transition in its CFO position, which could lead to uncertainties during the leadership change.
