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On Thursday, Piper Sandler showed increased optimism for Snowflake Inc . (NYSE: NYSE:SNOW), raising the price target on the company’s stock to $215 from the previous $175 while maintaining an Overweight rating. The adjustment follows Snowflake’s solid performance in the first quarter, which surpassed expectations with a $39 million beat on product growth, marking a 26% year-over-year increase. According to InvestingPro data, the company has maintained impressive revenue growth of 29.21% over the last twelve months, though current technical indicators suggest the stock is in overbought territory. This robust execution comes despite a backdrop of economic uncertainty.
The firm’s analysts highlighted Snowflake as one of their top growth picks for 2025, citing its potential to adhere to a Rule 50 model—characterized by 25% growth and over 25% free cash flow (FCF) margins at a scale of more than $4 billion in annual recurring revenue (ARR). With a current market capitalization of $59.76 billion and a healthy gross profit margin of 66.72%, InvestingPro analysis shows the company maintains strong financial health with a current ratio of 1.78, indicating solid liquidity. The raised price target reflects a growing confidence in Snowflake’s efficient growth model and its ability to maintain a high-quality data and artificial intelligence (AI) platform that is expected to sustain over 20% growth alongside more than 25% FCF margins.
The endorsement by Piper Sandler comes as Snowflake continues to demonstrate its capability to excel in an uncertain macroeconomic environment. The company’s recent quarterly results, which exceeded guidance, serve as a testament to its strong product growth trajectory and operational efficiency. Discover more insights about Snowflake’s performance with InvestingPro, which offers exclusive access to 10+ additional ProTips and comprehensive financial analysis through the Pro Research Report, helping investors make more informed decisions.
Snowflake’s focus on data and AI has positioned it as an enabler in these sectors, with the expectation that it will continue to capture market share and deliver value to shareholders. The Overweight rating suggests that Piper Sandler views Snowflake’s stock as a favorable investment with potential for returns that exceed the average market performance.
Investors are likely to watch Snowflake closely as it progresses towards its projected ARR scale and aims to maintain its growth and profitability margins. The company’s success in navigating economic challenges while delivering impressive growth figures may continue to attract attention in the technology sector.
In other recent news, Snowflake Inc. reported its first-quarter earnings for fiscal year 2026, surpassing analysts’ expectations with non-GAAP earnings per share of $0.24 and total revenue of $1.04 billion, marking a 22% year-over-year growth. Product revenue reached $997 million, exceeding estimates by 4%. Despite strong earnings, Snowflake’s free cash flow of $183.4 million fell short of the consensus due to delayed renewals. Analysts have responded positively, with Wolfe Research raising its price target to $230, citing Snowflake’s growth potential in AI and cloud data warehousing. Similarly, BofA Securities increased its target to $220, noting positive consumption trends but expressing caution about future growth. Citizens JMP set a new target of $245, highlighting the company’s robust financial performance. Meanwhile, Morgan Stanley (NYSE:MS) adjusted its target to $200, emphasizing Snowflake’s stable business and growth prospects in data engineering. Bernstein SocGen raised its target to $191, acknowledging Snowflake’s strong quarter but maintaining a cautious outlook on long-term growth.
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