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On Monday, Citi analysts adjusted their valuation of Snowflake Inc . (NYSE: NYSE:SNOW), increasing the price target to $235 from $230, while reiterating a Buy rating on the stock. Currently trading at $143.55, Snowflake has experienced a significant 31% gain over the past six months, despite recent volatility. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculations. The revision follows Snowflake’s fourth-quarter earnings, which bolstered confidence in the company’s growth trajectory, particularly in the second half of fiscal year 2026.
Tyler Radke of Citi cited Snowflake’s recent earnings report as a key factor in the updated model. The company has demonstrated strong execution with a 29.21% revenue growth and an impressive 66.72% gross profit margin in the last twelve months. The report suggested that the company is positioned to continue its 30% revenue growth and maintain a free cash flow margin (FCFM) above 25%. This performance would keep Snowflake in the top tier of software companies adhering to the Rule of 40—a benchmark for tech companies to balance growth and profitability.
The analysis was further informed by interactions at a recent conference and discussions with partners. Feedback indicated robust demand for Snowflake’s data engineering products, including Cortex, across various sectors, notably financial services and transportation. These insights support the view that Snowflake is successfully replacing legacy systems with its modern solutions.
Radke emphasized the potential for Snowflake to reaccelerate in the latter half of the year. Despite the company’s share price being approximately 20% below the January peak, the analyst’s confidence in the company’s prospects has grown. This optimism is reflected in the increased revenue and profitability forecasts, leading to the raised price target, which is based on approximately 20 times the estimated enterprise value to sales ratio for calendar year 2025/fiscal year 2026.
Snowflake’s commitment to innovation and its ability to capitalize on the increasing demand for artificial intelligence solutions are pivotal in maintaining its status as a leader in the software industry. The company’s strategic positioning and favorable market conditions contribute to the positive outlook from Citi analysts. InvestingPro data reveals that 18 analysts have recently revised their earnings expectations upward, with comprehensive analysis available in the Pro Research Report, which provides deep-dive insights into Snowflake’s financial health, market position, and growth prospects among 1,400+ top US stocks.
In other recent news, Snowflake Inc. has announced a significant leadership change with the appointment of Mike Gannon as the new Chief Revenue Officer, effective March 14, 2025. This transition follows the retirement of Chris Degnan, who has been a key figure in Snowflake’s growth to $3.4 billion in revenue last fiscal year. Snowflake is also highlighted by RBC Capital Markets and DA Davidson for its promising growth trajectory. RBC maintained its Outperform rating with a $221 price target, while DA Davidson reiterated a Buy rating with a $225 target. Both firms emphasize Snowflake’s potential in the cloud and AI sectors, with DA Davidson noting the company’s ability to sustain over 20% growth in 2025. Meanwhile, Monday.com has caught the attention of DA Davidson analysts, who see the company as resilient amidst market volatility. The firm’s positive outlook suggests Monday.com could demonstrate strong growth potential despite economic uncertainties. These developments underscore the dynamic nature of the software sector and the strategic maneuvers companies like Snowflake and Monday.com are making to capitalize on market opportunities.
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