Needham raises Snowflake stock price target to $215

On Thursday, Needham analysts increased the price target for Snowflake Inc . (NYSE: NYSE:SNOW) shares, raising it to $215 from the previous $200, while maintaining a Buy rating on the stock. Currently trading at $166.19, the stock has experienced a significant 43.8% surge over the past six months, despite a recent 10.2% pullback last week. According to InvestingPro data, analyst targets range from $115 to $235, with a strong consensus recommendation of 1.77 (where 1 is Strong Buy). The adjustment follows Snowflake’s consistent consumption trends and successful introduction of new products, which bolstered management’s confidence. As a result, revenue guidance for the fiscal year 2026 was set significantly above the sell-side forecast, with an expected growth acceleration in the latter half of the year. The company has maintained impressive revenue growth of 30.3% over the last twelve months, with InvestingPro analysis showing strong financial health metrics, including a healthy current ratio of 1.88 and moderate debt levels.

According to Needham, Snowflake’s Snowpark has reached the anticipated 3% of Product Revenue. The company also reports strong adoption of its Data Engineering and AI/ML features. Furthermore, several major customers have exceeded their spending commitments, shifting to on-demand contracts that are not currently reflected in Remaining Performance Obligations (RPO). This shift is likely to provide a boost to future bookings. While currently not profitable, with a negative EBITDA of $1.2 billion, analysts tracked by InvestingPro predict profitability this year, with an EPS forecast of $0.76 for FY2025. For deeper insights into Snowflake’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

The firm also foresees an improvement in the acquisition of new logos in FY26, attributed to strategic changes in the go-to-market approach and performance management. These developments come under the leadership of CEO Sridhar Ramaswamy, whose efforts are believed to be catalyzing Snowflake’s ability to outperform expectations. The company maintains a strong gross profit margin of 67.3%, demonstrating efficient operations despite current market challenges.

Needham’s maintained Buy rating is a vote of confidence in Snowflake’s trajectory, supported by the company’s accelerated product development and market strategy. As the firm anticipates these factors to drive continued success, Snowflake’s stock outlook appears positive according to Needham’s analysis.

In other recent news, Snowflake Inc. reported strong fourth-quarter earnings, surpassing product revenue expectations by 3.6% and achieving a 28% year-over-year increase, reaching $943 million. The company provided guidance for fiscal year 2026, projecting product revenue growth of 24%, exceeding consensus estimates. Snowflake’s non-GAAP operating margins also impressed, reaching 9.4%, which was significantly higher than anticipated. Analyst firms such as KeyBanc Capital Markets, Loop Capital Markets, Evercore ISI, Citizens JMP, and Raymond (NSE:RYMD) James have responded positively, raising their price targets for Snowflake to $220, $215, $230, $201, and $196, respectively, while maintaining favorable ratings. These firms noted Snowflake’s effective sales execution, strong adoption of new data engineering and AI capabilities, and positive contributions from its Iceberg initiative. Additionally, Snowflake announced an expanded partnership with Microsoft (NASDAQ:MSFT), enabling the integration of OpenAI models within its platform. In executive news, CFO Mike Scarpelli has announced his intention to retire, remaining in his role until a successor is appointed. These developments underscore Snowflake’s robust growth trajectory and its strategic moves to capitalize on emerging market opportunities.

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