Shares of the software company Snowflake (NYSE:SNOW), which provides data management solutions, are down about 28% year-to-date. This decline reflects the enterprise’s reduced IT spending budget and competition in the sector. Nonetheless, analysts from Goldman Sachs and Jefferies see this dip as an opportunity for investors to buy the stock at current levels.
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SNOW Stock in Goldman’s Conviction List
On July 1, Goldman Sachs added Snowflake stock to its Americas Conviction List, indicating that these stocks may outperform the market. Goldman analyst Kash Rangan sees this pullback in SNOW stock as an attractive buying opportunity.
Rangan thinks the company’s focus on speeding up product development will increase demand and boost revenue growth. The analyst predicts that Snowflake’s revenue growth will reaccelerate to over 30% annually. Moreover, he added that the company’s high free cash flow margins are not yet reflected in its current stock price.
The five-star analyst is bullish about SNOW’s prospects, and his price target of $220 implies a 54% upside potential from current levels.
SNOW Stock Among Jefferies’ Top Data Pick
Jefferies analyst Brent Thill also views Snowflake as a strong investment choice. The analyst termed SNOW stock one of his top data picks for the second half of 2024. Thill listed multiple factors, including AI opportunity, product innovation, stabilizing demand trends, and easier year-over-year comparisons, as catalysts.
Thill believes Snowflake’s growth will accelerate even without AI contributions, driven by opportunities in its core business and easier comparisons. Thill pointed out that Snowflake’s valuation has come down. SNOW stock’s valuation is now roughly in line with the industry average, making it an opportune time for investors to consider buying.
Thill reiterated a Buy rating on SNOW stock on July 1 with a price target of $160, implying 12% upside potential from current levels.
Is Snowflake a Good Stock to Buy?
Most analysts covering Snowflake stock recommend a Buy. SNOW stock has a Strong Buy consensus rating based on 25 Buys and eight Hold recommendations. The analysts’ price target on SNOW stock is $203.59, implying an upside potential of 42.51%.
