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On Thursday, Morgan Stanley (NYSE:MS) updated its outlook on Snowflake Inc . (NYSE: NYSE:SNOW), increasing the price target to $200 from $185 while maintaining an Equalweight rating on the company’s shares. The adjustment follows Snowflake’s first-quarter performance, which was described as "clean and impressive" by the firm. With a current market capitalization of $59.76 billion and trading at $179.12, InvestingPro analysis indicates the stock is currently trading near its Fair Value.
The research firm highlighted Snowflake’s enhanced growth prospects, noting a positive shift in investor sentiment compared to the previous year. The analysis underscored the company’s stable core business and growing momentum in data engineering. The company has demonstrated strong execution with revenue growth of 29.21% over the last twelve months. Additionally, early signs of progress in artificial intelligence and applications were seen as indicators of potential for sustained growth exceeding 20% in the coming years, alongside improving operating margins.
Morgan Stanley emphasized the role of Snowflake’s CEO, Sridhar Ramaswamy, in leading a successful turnaround that has made the company’s valuation more appealing, despite it not being considered inexpensive at 52 times the calendar year 2026 free cash flow, which is 2.2 times growth-adjusted. While InvestingPro data shows the company isn’t yet profitable, analysts predict profitability this year. The firm’s increased confidence in Snowflake’s growth durability and execution led to the raised price target. Get access to 8 more exclusive InvestingPro Tips and comprehensive analysis in the Pro Research Report.
The firm suggested that any pullbacks in Snowflake’s stock price could present a more favorable opportunity for investors to become more constructive on the stock. The recommendation to take advantage of such pullbacks stems from the firm’s revised estimates and heightened assurance in the company’s growth trajectory and solid operational performance. With analyst targets ranging from $115 to $440, investors seeking detailed valuation metrics and real-time analysis can explore the comprehensive research available on InvestingPro.
In other recent news, Snowflake Inc. reported its financial results for the first quarter of 2025, exceeding Wall Street expectations. The company announced an earnings per share (EPS) of $0.24, surpassing the forecasted $0.21, and reported revenue of $1.04 billion, which was above the anticipated $1.01 billion. Product revenue saw a 26% increase year-over-year, reaching $997 million. The company’s remaining performance obligations grew by 34% to $6.7 billion, reflecting strong market confidence. Analysts noted the company’s strong net revenue retention rate of 124%. Snowflake’s strategic focus on AI and data integration has been highlighted as a key driver of its growth. The company projects second-quarter product revenue between $1.035 billion and $1.040 billion, representing a 25% year-over-year growth. For the full fiscal year 2026, Snowflake maintains its revenue guidance at $4.325 billion.
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