What the bad jobs report means for markets
On Monday, DA Davidson maintained a positive stance on Snowflake Inc . (NYSE: NYSE:SNOW), reiterating its Buy rating and a price target of $225.00. The firm’s analysts underscored Snowflake as a top software pick for 2025, emphasizing the attractive valuation following the recent decline in its stock price. With a current market capitalization of $51.53 billion and trading near its InvestingPro Fair Value, the stock has shown resilience with a 40% gain over the past six months. The analysts believe that Snowflake presents a compelling investment opportunity, trading at 9 times its projected calendar year 2026 revenue and 34 times its forecasted free cash flow for the same period.
According to DA Davidson, Snowflake’s revenue growth trajectory is poised for continued expansion. This outlook is supported by proprietary developer data and ongoing discussions with The DEN, an educational initiative by Snowflake aimed at building a community of data-driven professionals. The company’s robust 29.2% revenue growth in the last twelve months and strong financial health metrics, as revealed by InvestingPro data, support this view. The analysts pointed out that Snowflake is one of the few software companies expected to sustain a growth rate of over 20% in 2025.
The firm’s enthusiasm for Snowflake’s prospects is further bolstered by the company’s positioning within two significant technological shifts: the rise of artificial intelligence and the broader migration to cloud computing. DA Davidson’s analysts have expressed increased confidence in Snowflake, stating that while they were already favorable towards the company at previous valuations, the recent price drop has only enhanced its appeal.
Snowflake’s growth narrative, as highlighted by DA Davidson, is not solely contingent on current performance but also on the company’s strategic alignment with industry trends. The firm’s reiterated Buy rating and price target reflect a long-term perspective on Snowflake’s potential to capitalize on these trends and deliver substantial growth in the coming years.
In other recent news, Snowflake Inc. reported its fourth-quarter earnings, which met expectations and showcased a strong product revenue performance, exceeding the midpoint of its guidance by 4%. This positive outcome has led Deutsche Bank (ETR:DBKGn) to raise its price target for Snowflake shares to $220, maintaining a Buy rating, while Stifel increased its target to $210, also with a Buy rating. Both firms highlighted Snowflake’s robust product development and effective cost management as key drivers behind these results. Additionally, Snowflake announced the appointment of Mike Gannon as the new Chief Revenue Officer, succeeding Chris Degnan, who is retiring. Gannon’s extensive experience in sales and strategic planning is expected to support Snowflake’s growth and market expansion.
In another development, Snowflake is set to open a new Silicon Valley AI Hub and plans to invest up to $200 million in AI-focused startups. This initiative includes the expansion of its Startup Accelerator Program, offering technical assistance and access to venture capital. The company is also investing $20 million in its One Million Minds + One Platform program, aiming to upskill individuals in AI and data analytics. These strategic moves underscore Snowflake’s commitment to advancing AI technology and strengthening its position in the enterprise AI space.
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