Snowflake stock price target raised to $215 at Loop Capital

On Thursday, Loop Capital Markets increased the price target for Snowflake Inc . (NYSE: NYSE:SNOW) to $215, up from the previous $205, while retaining a Buy rating on the company’s shares. Currently trading at $166.19 with a market cap of $54.9 billion, Snowflake Inc. concluded its fiscal year on a strong note, with product revenue climbing by 28% to reach $943 million, surpassing Loop Capital’s estimates by 3.5%. The company’s remaining performance obligations (RPO) saw a year-over-year increase of 32%, and non-GAAP operating margins reached 9.4%, which was 500 basis points higher than anticipated. According to InvestingPro data, the company maintains strong financial health with a current ratio of 1.88, indicating robust liquidity.

Snowflake’s management has provided guidance for a 24% growth in product revenue, exceeding the consensus model’s projection of 23%. This aligns with the company’s impressive revenue growth of 30.3% over the last twelve months. Additionally, the company is aiming to enhance its profitability, with an 8% non-GAAP operating margin target. Following the announcement, Snowflake’s stock experienced a 9% uptick in after-market trading, though InvestingPro analysis suggests the stock is currently trading above its Fair Value.

Loop Capital’s analyst highlighted Snowflake’s effective sales execution, the growing momentum among large customers, contributions from new products, and favorable competitive dynamics as key factors behind the solid performance. The analyst also noted that Snowflake is well-positioned to capitalize on the trend of moving analytical workloads to the cloud and is making significant progress in the emerging AI data management market. With an overall Financial Health score of "FAIR" and analysts predicting profitability this year, detailed insights and additional ProTips are available in the comprehensive Pro Research Report on InvestingPro.

The recommendation from Loop Capital to maintain a Buy rating on Snowflake comes with an optimistic outlook on the company’s revamped sales engine and its robust pipeline of new products. The firm believes that Snowflake is executing its strategy effectively, which justifies the increased price target and the positive stock rating. This aligns with the broader analyst consensus, as the stock currently has a "Buy" rating with a potential upside of 23% based on analyst targets.

In other recent news, Snowflake Inc. reported impressive fourth-quarter earnings, surpassing both management’s guidance and analyst expectations with product revenue of $943.3 million, marking a 28% year-over-year increase. The company’s operating margins also exceeded projections, reaching 9% compared to the anticipated 4%. Following these results, several analyst firms have raised their price targets for Snowflake, reflecting increased confidence in the company’s growth trajectory. Evercore ISI increased their target to $230, while Cantor Fitzgerald set theirs at $228, and Piper Sandler adjusted theirs to $215, all maintaining positive ratings on the stock.

Additionally, Citizens JMP raised their price target to $201, emphasizing Snowflake’s product differentiation and rapid innovation pace as key growth drivers. Raymond (NSE:RYMD) James also lifted their target to $196, noting the positive impact of Snowflake’s Iceberg tables on workload processing. Analysts have highlighted Snowflake’s robust consumption patterns and strategic partnerships, including a strengthened collaboration with Microsoft (NASDAQ:MSFT). The company’s ongoing product development, particularly in AI and data engineering, is expected to drive future growth, as noted by several analysts, including Cantor Fitzgerald and Piper Sandler.

Furthermore, Snowflake announced the upcoming retirement of CFO Mike Scarpelli, who will remain in his role until a successor is appointed. Despite this transition, analysts remain optimistic about Snowflake’s ability to sustain its growth and margin expansion. With a focus on new product offerings and a strong partner ecosystem, Snowflake is positioned to capitalize on a growing market opportunity projected to expand significantly over the next few years.

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