Snowflake (SNOW) AI Stock Analysis

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Snowflake

(NYSE:SNOW)

Rating:68Neutral

Price Target:

$255.00

▲(13.04% Upside)

Snowflake's overall stock score is driven by strong earnings call performance and positive technical indicators, despite challenges in profitability and valuation concerns. The company's strategic focus on AI and customer expansion supports a positive outlook, but profitability remains a key area for improvement.

Positive Factors

Financial Performance

Snowflake reported strong FQ2 results, with product revenue up 32% YOY well above the 26%, driven by all four product categories.

Innovation and Product Development

Snowflake's innovation engine is rapidly producing new products, including AI-related features, which are positively impacting the business.

Leadership Change

Snowflake appoints Brian Robins to Chief Financial Officer, bringing a deep level of operational and finance expertise.

Negative Factors

Future Performance Expectations

The company doesn't expect the same beat level moving forward, though remains positive on the broad momentum.

Guidance and Forecast

An added layer of conservatism to near term guidance is anticipated during the transition to a new CFO.

Snowflake (SNOW) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$75.27B

Dividend YieldN/A

Average Volume (3M)6.70M

Price to Earnings (P/E)―

Beta (1Y)1.38

Revenue Growth28.37%

EPS Growth-35.49%

CountryUS

Employees7,834

SectorTechnology

Sector Strength82

IndustrySoftware - Application

Share Statistics

EPS (TTM)0.35

Shares Outstanding333,658,000

10 Day Avg. Volume11,636,108

30 Day Avg. Volume6,696,990

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap0.98

Enterprise Value/Revenue17.99

Enterprise Value/Gross Profit27.01

Enterprise Value/Ebitda-63.26

Forecast

1Y Price Target

$265.68

Price Target Upside17.78% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering36

Snowflake Business Overview & Revenue Model

Company DescriptionSnowflake 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 MoneySnowflake generates revenue primarily through a consumption-based pricing model, where customers pay based on the amount of data they store and the compute resources they use for processing. This includes charges for data storage, data processing (compute usage), and data transfer. Additionally, Snowflake offers various subscription tiers that provide access to its services, with customers often entering multi-year contracts. Key revenue streams include enterprise accounts and partnerships with major cloud service providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform, which enhance its distribution and customer reach. The company's ability to scale its services and cater to diverse industries further contributes to its revenue growth.

Snowflake Key Performance Indicators (KPIs)

Any

Total Customers

Total Customers
Shows the total number of customers, reflecting market penetration and the company's ability to attract and retain clients.

Chart InsightsSnowflake's customer base has been expanding consistently, with a notable acceleration in recent quarters. The latest earnings call highlights a 19% year-over-year increase in net new customers, aligning with strategic product innovations and expanded AI capabilities. This growth is underpinned by major contract signings and successful product launches, suggesting strong market demand and effective customer acquisition strategies. Despite heavy capital expenditures, the company's robust revenue growth and operational efficiency indicate a solid trajectory, enhancing its competitive position in the data cloud market.

Data provided by:

Main Street Data

Snowflake Earnings Call Summary

Earnings Call Date:Aug 27, 2025

(Q2-2026)

% Change Since: |

Next Earnings Date:Nov 26, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong growth in product revenue and AI adoption, complemented by strategic partnerships and a robust customer base expansion. Despite some challenges in Europe and increased hiring costs, the overall performance and outlook remain positive.

Q2-2026 Updates

Positive Updates

Strong Product Revenue Growth

Product revenue for Q2 was $1.09 billion, up 32% year over year, demonstrating an acceleration in growth from last quarter.

Healthy Financial Metrics

Non-GAAP operating margin increased to 11%, and the non-GAAP product gross margin was 76.4%. Non-GAAP adjusted free cash flow margin was 6% in Q2.

Expansion in AI and New Features

AI influenced nearly 50% of new logos won in Q2, and 6,100 accounts were using Snowflake's AI weekly. Approximately 250 capabilities were launched to general availability in the first half of the year.

Strong Customer and Partner Growth

Added 533 customers, including 15 Global 2,000 companies, and net new customer adds in the quarter were up 21% year over year.

Strategic Partnerships and Integration

Azure was the fastest-growing cloud at 40% year over year, with strong alignment with Microsoft and partnerships with OpenAI and Anthropic.

Negative Updates

Challenges in Europe

While Europe is contributing to growth, it is still developing and lagging behind the U.S. in terms of customer acquisition and growth.

Operational and Hiring Costs

Added 529 heads, including 364 in sales and marketing, which could impact operating margins in the short term.

Company Guidance

During Snowflake's Q2 Fiscal 2026 earnings call, the company provided robust guidance for the upcoming quarters, highlighting several key metrics and achievements. Snowflake reported a 32% year-over-year increase in product revenue, reaching $1.09 billion, with remaining performance obligations totaling $6.9 billion, reflecting a 33% year-over-year growth. The net revenue retention rate stood at a healthy 125%, while the non-GAAP operating margin improved to 11%. For Q3, Snowflake expects product revenue between $1.125 billion and $1.13 billion, representing 25-26% year-over-year growth, and a non-GAAP operating margin of 9%. The full-year Fiscal 2026 product revenue guidance was increased to $4.395 billion, indicating 27% year-over-year growth, with expectations for a 75% non-GAAP product gross margin and a 9% non-GAAP operating margin. Additionally, Snowflake is targeting a non-GAAP adjusted free cash flow margin of 25% for the full year. The company emphasized its commitment to scaling efficiently, with strategic investments in growth, partnerships, and product innovation, particularly in AI, where 25% of new logos were influenced by AI capabilities, and 50% of new use cases involve AI, reinforcing Snowflake's position as a leader in the enterprise AI space.

Snowflake Financial Statement Overview

Summary

Snowflake demonstrates strong revenue growth and a solid balance sheet, but faces challenges in achieving profitability and cash flow efficiency. The company needs to focus on improving operational margins and cash generation to enhance its financial health.

Income Statement

Positive

Snowflake shows strong revenue growth with a 7.19% increase in TTM, indicating robust demand for its services. However, profitability remains a challenge, with negative net profit and EBIT margins. The gross profit margin is healthy at 66.6%, but the company needs to improve operational efficiency to achieve profitability.

Balance Sheet

Positive

The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 1.10 in TTM. However, the negative return on equity highlights ongoing profitability challenges. The equity ratio is strong, indicating a solid capital structure.

Cash Flow

Neutral

Cash flow analysis shows a decline in free cash flow growth by 87% in TTM, raising concerns about cash generation. The operating cash flow to net income ratio is low, suggesting limited cash conversion efficiency. However, the free cash flow to net income ratio is relatively strong, indicating some ability to generate cash despite losses.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.12B	3.63B	2.81B	2.07B	1.22B	592.05M
Gross Profit	2.74B	2.41B	1.91B	1.35B	760.89M	349.46M
EBITDA	-1.17B	-1.10B	-729.32M	-752.46M	-693.54M	-534.11M
Net Income	-1.38B	-1.29B	-836.10M	-796.71M	-679.95M	-539.10M
Balance Sheet
Total Assets	8.20B	9.03B	8.22B	7.72B	6.65B	5.92B
Cash, Cash Equivalents and Short-Term Investments	3.59B	4.64B	3.85B	4.01B	3.85B	3.91B
Total Debt	2.69B	2.69B	287.98M	251.66M	206.30M	204.54M
Total Liabilities	5.82B	6.03B	3.03B	2.25B	1.60B	985.27M
Stockholders Equity	2.37B	3.00B	5.18B	5.46B	5.05B	4.94B
Cash Flow
Free Cash Flow	751.33M	913.49M	778.90M	496.50M	81.19M	-85.75M
Operating Cash Flow	837.70M	959.76M	848.12M	545.64M	110.18M	-45.42M
Investing Cash Flow	-397.49M	190.65M	832.26M	-597.88M	-20.80M	-4.04B
Financing Cash Flow	199.43M	-226.52M	-854.10M	-92.62M	178.20M	4.78B

Snowflake Technical Analysis

Technical Analysis Sentiment

Positive

Last Price225.58

Price Trends

50DMA

212.06

Positive

100DMA

198.65

Positive

200DMA

182.12

Positive

Market Momentum

MACD

5.66

Negative

RSI

59.39

Neutral

STOCH

57.34

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 225.58 is above the 20-day moving average (MA) of 206.20, above the 50-day MA of 212.06, and above the 200-day MA of 182.12, indicating a bullish trend. The MACD of 5.66 indicates Negative momentum. The RSI at 59.39 is Neutral, neither overbought nor oversold. The STOCH value of 57.34 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 (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DT	77 Outperform	$15.08B	30.77	20.69%	―	18.70%	214.47%
WDAY	73 Outperform	$61.70B	106.87	6.66%	―	14.21%	-62.56%
SNOW	68 Neutral	$75.27B	―	-42.45%	―	28.37%	-35.49%
DDOG	68 Neutral	$45.96B	393.18	4.45%	―	26.00%	-25.64%
Sector *	61 Neutral	$35.55B	8.88	-11.02%	1.87%	8.55%	-8.14%
TEAM	58 Neutral	$45.23B	―	-21.58%	―	19.66%	15.17%
MSTR	46 Neutral	$95.24B	29.57	18.01%	0.08%	-3.81%	―

* Technology Sector Average

Performance Comparison

SNOW

Snowflake

225.58

115.62

105.15%

MSTR

Strategy

335.87

211.05

169.08%

WDAY

Workday

231.08

-22.44

-8.85%

TEAM

Atlassian

172.43

9.74

5.99%

Dynatrace

50.00

-0.90

-1.77%

DDOG

Datadog

136.08

28.38

26.35%

Snowflake Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Snowflake Appoints New CFO Amid Strategic Shift

Positive

Sep 3, 2025

On September 3, 2025, Snowflake announced the appointment of Brian Robins as the new Chief Financial Officer, effective September 22, 2025. Robins, who has extensive experience in financial leadership roles at technology companies like GitLab, Sisense, and Cylance, will succeed Mike Scarpelli, who is retiring but will remain temporarily to ensure a smooth transition. This leadership change is expected to support Snowflake’s growth and strategic direction in the AI and data industry, as Robins will be responsible for shaping the company’s financial strategies and leading its global finance organization.

Executive/Board ChangesShareholder Meetings

Snowflake Stockholders Approve Key Governance Changes

Neutral

Jul 3, 2025

On July 2, 2025, Snowflake Inc. held its Annual Meeting of Stockholders, where key decisions were made regarding the company’s governance structure. Stockholders approved the elimination of Class B common stock and the renaming of Class A common stock to ‘Common Stock,’ effective immediately after filing with the State of Delaware. Additionally, the election of Class II directors was confirmed, while a proposal to declassify the board was not approved. The meeting also saw the ratification of PricewaterhouseCoopers LLP as the independent auditor for the fiscal year ending January 31, 2026.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Sep 04, 2025