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On Monday, KeyBanc Capital Markets maintained their Overweight rating on Snowflake Inc . (NYSE:SNOW) with a consistent price target of $192.00. The company, currently valued at $58.1 billion, has seen its stock surge 38.8% over the past six months. KeyBanc’s analyst, Eric Heath, provided insights from a recent survey of 15 Snowflake customers and partners, which included discussions to gauge the current sentiment and future intentions regarding spending and product adoption. According to InvestingPro data, Snowflake is trading near its Fair Value, with analysts setting price targets ranging from $115 to $235.
The survey revealed a mixed outlook, with positive aspects such as an increased adoption of Snowpark and a belief among customers that they are managing their Snowflake usage more effectively now compared to the post-COVID period. Additionally, a rising percentage of respondents view Snowflake as more strategic than competitor Databricks on a quarter-over-quarter basis. This strategic positioning is reflected in Snowflake’s robust revenue growth of 29.2% and impressive gross profit margin of 66.7%. InvestingPro subscribers can access 8 additional key tips about Snowflake’s financial health and market position.
Conversely, the survey also indicated some concerns. Approximately 40% of customers have recently curtailed or are planning to curtail their spending due to macroeconomic conditions. There were also early signs that the Iceberg initiative might be leading to workload shifts away from Snowflake. Moreover, despite high interest levels, the adoption of Cortex and GenAI technologies is still in the early stages.
The KeyBanc analyst pointed out that the survey results present both positive and negative factors that are expected to balance each other out. As a result, KeyBanc’s estimates for Snowflake remain unchanged. The firm anticipates that increased Snowpark adoption, which is projected to contribute around 3% to Snowflake’s FY25 revenues, will be counterbalanced by the nascent adoption of Cortex and Iceberg technologies. While currently reporting losses with an EPS of -$3.86, analysts tracked by InvestingPro forecast profitability in the coming year. For detailed analysis and comprehensive insights, investors can access Snowflake’s Pro Research Report, part of InvestingPro’s coverage of over 1,400 US stocks.
In other recent news, Snowflake Inc. has been the subject of various analyst reviews and strategic developments. BTIG has maintained its Buy rating for Snowflake with a price target of $220, citing confidence in the company’s strategic positioning and innovative products like Snowpark and Iceberg Tables. Mizuho (NYSE:MFG), on the other hand, adjusted its price target to $190 from $205, while still rating Snowflake as Outperform, pointing to robust consumption activity and new revenue streams as growth drivers. Evercore ISI also reiterated its Outperform rating with a $230 price target, expressing confidence in Snowflake’s ability to sustain growth despite potential economic challenges.
In addition to analyst insights, Snowflake has made strides in government and defense sectors, securing the Department of Defense Impact Level 5 Provisional Authorization for its operations on AWS GovCloud. This authorization allows Snowflake to offer secure data solutions to DOD agencies and related entities. Snowflake has also enhanced its support for Apache Iceberg tables, aiming to improve data activation and management for its users. This integration facilitates seamless data analysis across open and managed environments, aligning with Snowflake’s commitment to open standards and data innovation.
These developments underscore Snowflake’s strategic initiatives and market positioning, with analysts and the company itself expressing optimism about its future trajectory.
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