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Snowflake (SNOW)
NYSE:SNOW
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Snowflake
(NYSE:SNOW)69Neutral
Positive Factors
Partnerships
Snowflake announced a strengthened partnership with Microsoft, providing access to the latest OpenAI models.
Product Revenue
Product revenue growth of 28% significantly exceeded the Street's forecast.
Negative Factors
Leadership Changes
CFO Mike Scarpelli announced his retirement sooner than expected.
Snowflake (SNOW) vs. S&P 500 (SPY)
Market Cap
$57.31B
Dividend YieldN/A
Average Volume (3M)6.29M
Price to Earnings (P/E)―
Beta (1Y)1.57
Revenue Growth29.21%
EPS Growth-51.47%
CountryUS
Employees7,004
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)-3.86
Shares Outstanding330,100,000
10 Day Avg. Volume8,407,478
30 Day Avg. Volume6,293,270
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)16.78
Price to Cash Flow (P/CF)140.90
P/FCF Ratio183.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$213.06Price Target Upside20.16% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering36
Snowflake Business Overview & Revenue Model
Company DescriptionSnowflake Inc. is a cloud-based data-warehousing company founded in 2012 and headquartered in Bozeman, Montana. It operates within the technology sector, focusing on data storage, processing, and analytics services. Snowflake's core product is its data cloud platform, which allows organizations to store and analyze data using a single, integrated solution. This platform supports a variety of data workloads, including data engineering, data lakes, data science, and data application development.
How the Company Makes MoneySnowflake makes money primarily through a consumption-based revenue model. Customers are charged based on the amount of data stored and the computing resources used on its platform. This model includes charges for data storage, data transfer, and computing resources consumed during data processing and analysis. Snowflake also generates revenue from its data marketplace, where customers can purchase third-party data sets. Key partnerships with major cloud service providers like AWS, Microsoft Azure, and Google Cloud enhance Snowflake's service offerings and expand its customer reach, contributing significantly to its earnings.
Snowflake Financial Statement Overview
Summary
Snowflake demonstrates strong revenue growth and sound cash flow management, but faces profitability challenges due to high operating expenses and strategic investments. The balance sheet is healthy with moderate leverage, yet high liabilities compared to equity necessitate careful management.Income Statement
Snowflake shows robust revenue growth with a 29.23% increase from last year, indicating strong demand and market presence. However, the company is currently operating at a loss with a negative EBIT margin of -40.14% and a net profit margin of -35.46% in TTM, reflecting high operating expenses and significant strategic investments to drive growth.65
Positive
Balance Sheet
The balance sheet reflects a healthy equity position with an equity ratio of 34.13%. Snowflake has a manageable debt-to-equity ratio of 0.87, suggesting moderate leverage. However, high liabilities compared to equity may pose financial risks if not managed carefully.70
Positive
Cash Flow
Snowflake's cash flow is strong with operating cash flow exceeding net income, indicating efficient cash management. The free cash flow to net income ratio is favorable, and free cash flow increased by 20% year-over-year, suggesting robust liquidity and potential for reinvestment.75
Positive
| Breakdown | ||
| TTM | Mar 2024 | |
|---|---|---|
| Income Statement | Total Revenue | |
| 3.63B | 2.81B | Gross Profit |
| 2.41B | 1.91B | EBIT |
| -1.46B | -1.09B | EBITDA |
| -1.41B | -974.87M | Net Income Common Stockholders |
| -1.29B | -836.10M | |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |
| 4.16B | 3.85B | Total Assets |
| 8.20B | 8.22B | Total Debt |
| 2.60B | 287.98M | Net Debt |
| 446.70M | -1.47B | Total Liabilities |
| 5.27B | 3.03B | Stockholders Equity |
| 2.93B | 5.18B | |
| Cash Flow | Free Cash Flow | |
| 900.09M | 750.16M | Operating Cash Flow |
| 959.76M | 848.12M | Investing Cash Flow |
| 190.65M | 832.26M | Financing Cash Flow |
| -226.52M | -854.10M |
Snowflake Technical Analysis
Positive
177.31
Price Trends
173.52
Positive
157.29
Positive
142.23
Positive
Market Momentum
-0.84
Positive
50.23
Neutral
49.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNOW, the sentiment is Positive. The current price of 177.31 is below the 20-day moving average (MA) of 180.77, above the 50-day MA of 173.52, and above the 200-day MA of 142.23, indicating a neutral trend. The MACD of -0.84 indicates Positive momentum. The RSI at 50.23 is Neutral, neither overbought nor oversold. The STOCH value of 49.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SNOW.
Snowflake Risk Analysis
Snowflake disclosed 54 risk factors in its most recent earnings report. Snowflake reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Snowflake Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $29.74B | ― | -3.24% | ― | 30.77% | 79.05% | |
77 Outperform | $96.10B | 721.64 | -0.69% | ― | 31.35% | ― | |
69 Neutral | $57.31B | ― | -31.43% | ― | 29.21% | -51.47% | |
69 Neutral | $18.56B | 2,026.31 | 0.46% | ― | 15.33% | ― | |
67 Neutral | $48.63B | ― | -8.71% | ― | 28.76% | 58.13% | |
66 Neutral | $39.58B | 224.13 | 7.75% | ― | 26.12% | 274.50% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
SNOW
Snowflake
177.31
10.31
6.17%
OKTA
Okta
116.31
7.41
6.80%
ZS
Zscaler
196.45
-5.97
-2.95%
CRWD
CrowdStrike Holdings
365.44
35.87
10.88%
NET
Cloudflare
143.75
46.26
47.45%
DDOG
Datadog
115.09
-9.50
-7.63%
Snowflake Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: 6.69% | Next Earnings Date: May 21, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, high net revenue retention, significant product innovation, and expanded AI capabilities. However, there were challenges, including large customers exceeding contract capacity and needing to purchase on-demand, slower projected growth for Q1 due to leap year effects, and high stock-based compensation. Overall, the sentiment is positive given the strong growth and innovation, although tempered by some challenges.Highlights
Strong Revenue Growth
Product revenue for Q4 was $943 million, up 28% year-over-year, with remaining performance obligations totaling $6.9 billion, growing 33% year-over-year.
High Net Revenue Retention
Net revenue retention was a healthy 126%, indicating strong customer satisfaction and continued usage.
New Product Introductions
Snowflake introduced over 400 product capabilities to market, more than double the previous year, showing strong product innovation.
Positive Cash Flow and Margins
Q4 non-GAAP operating margin increased to 9%, and non-GAAP adjusted free cash flow margin was 43%.
Expansion of AI Capabilities
Introduced Cortex AI and expanded partnerships with Microsoft to incorporate OpenAI's models, making Snowflake the only platform hosting both Anthropic's and OpenAI's models.
Lowlights
Large Customers Exceeding Contract Capacity
Several large customers ran out of capacity before their contract end date, choosing to purchase as they consume rather than renewing.
Q1 Revenue Growth Projections
Q1 product revenue is expected to grow only 21% to 22% year-over-year, partially due to the impact of leap year.
Stock-Based Compensation
Stock-based compensation as a percentage of revenue is expected to decrease from 41% to 37% in FY '26, which remains relatively high.
Company Guidance
During Snowflake's Q4 fiscal 2025 earnings call, the company provided guidance for the first quarter and full year of fiscal 2026. Product revenue for Q1 is expected to be between $955 million and $960 million, reflecting a year-over-year growth of 21% to 22%. For the full fiscal year 2026, Snowflake anticipates product revenue of approximately $4.28 billion, representing a 24% year-over-year increase. The company also expects a non-GAAP operating margin of 5% in Q1, with FY '26 non-GAAP operating margin expanding to 8% and non-GAAP adjusted free-cash flow margin at 25%. Additionally, Snowflake forecasts its stock-based compensation as a percentage of revenue to decrease to approximately 37% from 41%, indicating an ongoing effort to improve efficiency and leverage AI for operational gains.Snowflake Corporate Events
Executive/Board Changes
Snowflake CFO Michael Scarpelli Announces Retirement
Neutral
Feb 26, 2025
On February 25, 2025, Snowflake Inc. announced that its Chief Financial Officer, Michael P. Scarpelli, intends to retire. The company is actively searching for his successor. Scarpelli will remain in his role until a successor is appointed and will then transition to an advisory role to ensure a smooth transition. A consulting agreement has been established for Scarpelli to serve as an independent contractor for 12 months post-departure, with his equity awards continuing to vest during this period.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.