Street Calls of the Week
On Tuesday, Citi analyst Tyler Radke increased the price target for Snowflake Inc . (NYSE: NYSE:SNOW) to $230 from the previous $225, while reaffirming a Buy rating for the company’s shares. According to InvestingPro data, the stock currently trades at $170.92, having experienced a significant 11.3% decline over the past week, though it remains up 47.5% over the last six months. Radke’s revised price target comes as the firm anticipates Snowflake’s fiscal fourth quarter 2024 results, which are expected to be in line with the company’s recent performance trend.
Snowflake has reportedly outperformed its peers within the quarter following strong fiscal third-quarter results and improved communication regarding the stabilization of consumption. Radke’s research indicates mixed signals, with early yet promising signs of AI monetization in the second half of the year, despite some partners experiencing a slowdown in growth trends and a dip in new customer acquisitions.
For the fourth quarter, the analyst expects Snowflake’s product revenue to normalize with an approximate 3% beat, translating to a 28% year-over-year increase. The forecast for fiscal year 2026 is set to begin at a 23% year-over-year growth rate, slightly below the 24-25% year-over-year target. Despite the mixed near-term catalyst path, Citi sees a compelling entry point for Snowflake’s shares at approximately 10 times the fiscal year 2026 enterprise value to sales ratio. While currently trading at high revenue multiples, InvestingPro analysis suggests the stock is fairly valued, with a current market capitalization of $56.4 billion.
The analyst also anticipates that the second half of the year could bring a reacceleration in growth, bolstered by the company’s AI initiatives. This outlook supports the firm’s continued endorsement of a Buy rating for Snowflake stock. Investors will be watching closely as the company prepares to release its fourth-quarter results on February 26, which will provide further insights into the company’s performance and growth trajectory. For deeper analysis and additional insights, including 8 more exclusive ProTips and comprehensive valuation metrics, visit InvestingPro.
In other recent news, Snowflake Inc. is preparing to release its fourth-quarter earnings report, with several analysts weighing in on the company’s prospects. DA Davidson reiterated a Buy rating with a $200 price target, highlighting Snowflake’s momentum in its data warehouse product and new AI/ML offerings. Bernstein raised its price target to $161, maintaining a Market Perform rating, citing stabilization in key business metrics like Net Revenue Retention and Current Remaining Performance Obligations. TD Cowen increased its price target to $210, expecting strong fourth-quarter performance and highlighting growth in core SQL workloads and new product engagement. KeyBanc also maintained a $210 price target, noting positive feedback from CIOs and partners about Snowflake’s strategic role and new product momentum. BofA Securities raised its target to $205, retaining a Neutral rating, acknowledging Snowflake’s growth while noting competitive pressures from Databricks. These developments reflect a mix of optimism and caution among analysts as investors await Snowflake’s earnings report to gauge its financial health and strategic progress.
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