Snowflake (SNOW) AI Stock Analysis

• Market Cap: $55.11B
• Dividend Yield: N/A
• Average Volume (3M): 6.41M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.37
• Revenue Growth: 28.48%
• EPS Growth: -19.12%
• Country: US
• Employees: 7,834
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.32
• Shares Outstanding: 342,200,000
• 10 Day Avg. Volume: 6,606,484
• 30 Day Avg. Volume: 6,407,250
• PEG Ratio: -20.95
• Price to Book (P/B): 32.21
• Price to Sales (P/S): 13.88
• P/FCF Ratio: 58.05
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 12.29
• Enterprise Value/Gross Profit: 18.29
• Enterprise Value/Ebitda: -45.18
• 1Y Price Target: $238.91
• Price Target Upside: 38.05% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 34
• EPS Forecast (FY): 1.77
• Revenue Forecast (FY): $5.91B

• Rating: 60 Neutral
• Price Target: $178.00 ▲(2.85% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is anchored by solid cash generation and a positive earnings-call outlook for sustained growth and margin/FCF progress. Offsetting these strengths are persistent GAAP losses and a weakening balance-sheet leverage trend, while technicals are clearly bearish and valuation is unattractive on earnings given the negative P/E.

Positive Factors

Free Cash Flow Strength

Sustained and expanding free cash flow (~$1.12B in 2026) materially de-risks Snowflake's business by funding operations, product development, and M&A without relying solely on equity raises. Cash conversion supports reinvestment and flexibility despite GAAP losses.

Durable Gross Margins

Consistently high product gross margins (mid‑60s to ~75% non‑GAAP) reflect strong pricing power and efficient cloud architecture. These margins provide room to invest in R&D and go‑to‑market while enabling operating leverage as revenue scales over the medium term.

Customer Retention & Large Deal Momentum

High net revenue retention (125%), accelerating RPO (+42%) and rising counts of >$1M and >$10M customers indicate strong product stickiness and expansion within enterprises. Large, multi-year contracts and AI workload adoption support durable revenue visibility.

Negative Factors

Persistent GAAP Losses

Ongoing GAAP losses and a deeply negative net margin (~-28% in 2026) mean profitability remains unproven on an accounting basis. This constrains return of capital, limits retained earnings buildup, and raises execution risk if growth or margin expansion stalls.

Rising Financial Leverage

Leverage increased materially (debt/equity ~1.36 in 2026), reducing balance sheet flexibility. Higher debt magnifies downside in slower growth scenarios, increases interest sensitivity, and limits capacity for opportunistic investments or large buybacks without improving profitability.

Margin & Growth Headwinds from AI and M&A

Management flags that new AI workloads have lower margins and Observe will create a ~150bp FCF headwind. Combined with potential 'sticker shock' from AI consumption, this raises predictability risks and could temper margin expansion and free cash flow progress in the medium term.

Snowflake Business Overview & Revenue Model

Company Description

Snowflake Inc. provides a cloud-based data platform in the United States and internationally. The company's platform offers Data Cloud, which enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data. Its platform is used by various organizations of sizes in a range of industries. The company was formerly known as Snowflake Computing, Inc. and changed its name to Snowflake Inc. in April 2019. Snowflake Inc. was incorporated in 2012 and is based in Bozeman, Montana.

How the Company Makes Money

Snowflake generates revenue primarily through a consumption-based pricing model, where customers pay for the amount of data storage and processing they utilize on the Snowflake platform. Key revenue streams include charges for data storage, compute resources used for processing queries, and data transfer fees. Snowflake also offers subscription services that provide customers with access to additional features and capabilities. Partnerships with leading cloud service providers, such as AWS, Azure, and GCP, enhance its market presence and allow it to tap into their customer bases. Additionally, integrations with various data tools and platforms help drive usage and customer retention, contributing to Snowflake's overall growth and revenue generation.

Snowflake Financial Statement Overview

Summary

Strong and improving free cash flow (about $1.12B in 2026) and durable gross margins (~65–68%) support business quality, but persistent net losses (~-28% net margin in 2026), decelerating growth, and rising leverage (debt-to-equity increasing to ~1.36 in 2026) meaningfully constrain the score.

Income Statement

Revenue has scaled meaningfully over time (from $0.6B in 2021 to $4.7B in 2026 annual), supported by consistently strong gross margins (~65–68%). However, profitability remains the key issue: net losses persist (2026 net margin ~-28%), and operating results are still materially negative, indicating the cost structure has not yet scaled to sustained earnings. Growth also appears to be decelerating versus earlier years, which raises the bar for margin improvement.

Balance Sheet

The balance sheet shows a notable increase in leverage: debt-to-equity rose from very low levels in 2022–2024 to ~0.90 in 2025 and ~1.36 in 2026, while equity declined versus prior years. With ongoing net losses, returns to shareholders remain negative, and higher leverage reduces flexibility if profitability takes longer to materialize. Offsetting this, the company still has a sizable asset base, but the trajectory in leverage is a clear risk factor.

Cash Flow

Cash generation is a strength. Operating cash flow and free cash flow are solidly positive and expanding (2026 free cash flow ~$1.12B, up sharply year over year), showing the model can fund operations despite accounting losses. Free cash flow is also strong relative to net income (loss), suggesting good cash conversion. The main weakness is that operating cash flow remains a modest share of revenue (~26% in 2026), so continued improvement is needed to fully de-risk the earnings profile.

Breakdown	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	4.68B	3.63B	2.81B	2.07B	1.22B
Gross Profit	3.15B	2.41B	1.91B	1.35B	760.89M
EBITDA	-1.44B	-1.10B	-729.32M	-752.46M	-693.54M
Net Income	-1.33B	-1.29B	-836.10M	-796.71M	-679.95M
Balance Sheet
Total Assets	9.13B	9.03B	8.22B	7.72B	6.65B
Cash, Cash Equivalents and Short-Term Investments	4.03B	4.64B	3.85B	4.01B	3.85B
Total Debt	2.74B	2.69B	287.98M	251.66M	206.30M
Total Liabilities	7.11B	6.03B	3.03B	2.25B	1.60B
Stockholders Equity	2.02B	3.00B	5.18B	5.46B	5.05B
Cash Flow
Free Cash Flow	1.12B	913.49M	778.90M	496.50M	81.19M
Operating Cash Flow	1.22B	959.76M	848.12M	545.64M	110.18M
Investing Cash Flow	312.24M	190.65M	832.26M	-597.88M	-20.80M
Financing Cash Flow	-1.39B	-226.52M	-854.10M	-92.62M	178.20M

Snowflake Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 173.06
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNOW, the sentiment is Neutral. The current price of 173.06 is below the 20-day moving average (MA) of 175.24, below the 50-day MA of 200.85, and below the 200-day MA of 218.45, indicating a bearish trend. The MACD of -9.85 indicates Negative momentum. The RSI at 43.58 is Neutral, neither overbought nor oversold. The STOCH value of 41.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SNOW.

Snowflake Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MDB	75 Outperform	$25.44B	-357.13	-3.23%	―	20.93%	68.47%
DT	72 Outperform	$10.22B	57.89	6.96%	―	18.50%	207.45%
WDAY	66 Neutral	$34.25B	51.54	8.23%	―	13.35%	-60.76%
DDOG	65 Neutral	$36.83B	372.48	3.34%	―	26.63%	-46.13%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SNOW	60 Neutral	$55.11B	-41.93	-54.09%	―	28.48%	-19.12%
TEAM	56 Neutral	$18.84B	-101.74	-13.47%	―	19.51%	53.35%

Snowflake Corporate Events

Snowflake director resigns following Observe acquisition completion

On January 28, 2026, Snowflake Inc. announced that Jeremy Burton, a Class III director and member of the Board’s Cybersecurity Committee, had tendered his resignation from the Board and all its committees, effective January 30, 2026. Burton’s departure is tied to Snowflake’s acquisition of Observe, Inc., completed on February 2, 2026, where he had previously served as chief executive officer and board member, and the company emphasized that his resignation was not due to any disagreement over Snowflake’s operations, policies, or practices. The Observe acquisition was cleared through internal governance channels, having been approved by a special committee of independent, disinterested directors and by the Board’s Audit Committee, underscoring Snowflake’s efforts to manage potential conflicts of interest and maintain robust oversight as it integrates Observe into its business.

The most recent analyst rating on (SNOW) stock is a Buy with a $300.00 price target. To see the full list of analyst forecasts on Snowflake stock, see the SNOW Stock Forecast page.