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On Thursday, BofA Securities analyst Brad Sills increased the price target on Snowflake Inc . (NYSE: NYSE:SNOW) shares to $220, up from the previous target of $172, while maintaining a Neutral rating on the company’s stock. Currently trading at $179.12 with a market capitalization of $59.76 billion, InvestingPro data indicates the stock is in overbought territory. The adjustment follows Snowflake’s solid first-quarter results, which highlighted positive consumption trends among existing customers.
Sills noted that the new price objective is predicated on a multiple of 48 times the estimated free cash flow for calendar year 2026 (C26e FCF), an increase from the prior multiple of 40 times. This valuation is in line with the growth at a reasonable price (GARP) group, which averages 1.7 times a 16% growth rate. The revised price target also accounts for an adjusted 28% compound annual growth rate (CAGR) over two years. According to InvestingPro analysis, Snowflake maintains impressive revenue growth of 29.21% and a healthy gross profit margin of 66.72%, though it’s currently trading at premium multiples.
Despite the increase in the price target, the BofA analyst expressed concerns about Snowflake’s future growth prospects. Specifically, Sills pointed out that Snowflake added only three net new Global 2000 customers, suggesting a potential slowdown in the shift to cloud-based data warehousing. While company commentary indicated that new workloads are increasing, Sills questioned whether these would significantly counterbalance the deceleration in core growth over time. InvestingPro subscribers can access detailed analysis of Snowflake’s financial health metrics and growth trajectory through comprehensive Pro Research Reports, available for over 1,400 US stocks.
Snowflake’s recent performance reflects a broader trend of improving consumption patterns within the company’s installed base. The firm’s financial metrics and market positioning were key factors in the reassessment of its value.
The BofA analyst’s comments indicate a cautious optimism for Snowflake’s ongoing performance, with the upgraded price target reflecting both the company’s solid quarterly outcomes and the broader industry’s valuation standards. Snowflake’s stock price will continue to be monitored by investors as the company navigates the competitive cloud data warehousing landscape.
In other recent news, Snowflake Inc. announced its first-quarter fiscal year 2026 earnings, reporting non-GAAP earnings per share of $0.24, surpassing the consensus estimate of $0.21. The company also exceeded revenue expectations with a total of $1.04 billion, compared to the anticipated $1.01 billion, marking a 22% year-over-year growth. Product revenue was particularly strong, reaching $997 million, a 26% increase from the previous year. Despite these positive earnings, Snowflake’s free cash flow of $183.4 million fell short of the consensus forecast of $384 million due to delayed renewals.
In related developments, Citizens JMP raised its price target for Snowflake shares to $245 from $201, maintaining a Market Outperform rating, while Morgan Stanley (NYSE:MS) increased its target to $200 from $185, keeping an Equalweight rating. Both firms noted Snowflake’s enhanced growth prospects and stable core business. Additionally, Snowflake’s total remaining performance obligations, which indicate future revenue under contract, rose to $6.69 billion, surpassing the consensus estimate and showing a 34% year-over-year increase. These recent developments underscore Snowflake’s strong market position and growth trajectory, driven by strategic investments in AI and data integration.
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