Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Tuesday, on the heels of a positive outlook towards Snowflake Inc . (NYSE:SNOW) shares, Canaccord Genuity increased the company’s price target from $190 to $220 while maintaining a Buy rating. The firm’s analyst cited several factors contributing to this optimistic view, including improved consumption trends, an increase in new customer acquisitions, and initial successes in AI monetization. Currently trading at $170.92, InvestingPro data shows the stock has seen a significant 47.5% surge over the past six months, despite a recent 11.3% pullback last week.
Snowflake, known for its cloud-based data warehousing services, is anticipated to see benefits from these factors in the fourth quarter. The analyst believes that while the fourth quarter guidance seems conservative, there is potential for a stronger fiscal year 2026 if the Net Revenue Retention (NRR) rate stabilizes and new products perform as expected. With impressive revenue growth of 30.3% and a robust gross profit margin of 67.3%, InvestingPro analysis reveals 8 additional key insights about Snowflake’s growth potential.
The analysis by Canaccord Genuity also highlighted Snowflake’s robust Free Cash Flow (FCF) margins, which are estimated to be strong at 26% for the fiscal year 2025. The firm expects the market to increasingly focus on Snowflake’s growth prospects and values the company at 17.5 times Enterprise Value to Sales (EV/Sales) based on revised estimates for fiscal year 2026. This is an increase from the previous valuation of approximately 15 times EV/Sales for the calendar year 2025 estimates.
Canaccord Genuity’s stance reflects confidence in Snowflake’s strategic position to benefit from the ongoing investment cycle in data management by customers. The raised price target is a signal to investors that Snowflake remains an attractive investment opportunity within the current trading ranges.
In other recent news, Snowflake Inc. is drawing attention from several analyst firms ahead of its upcoming fourth-quarter earnings report. Citi has increased its price target for Snowflake to $230, maintaining a Buy rating, with expectations of a 28% year-over-year increase in product revenue for the fourth quarter. DA Davidson also reiterated a Buy rating with a $200 price target, highlighting Snowflake as a top pick due to momentum in its core data warehouse product and AI/ML releases. Meanwhile, Bernstein raised its price target to $161, retaining a Market Perform rating, noting stabilization in key business metrics such as Net Revenue Retention and Current Remaining Performance Obligations.
TD Cowen has raised its price target for Snowflake to $210, maintaining a Buy rating, and anticipates strong fourth-quarter performance with potential for increased full-year 2026 estimates. The firm noted consistent growth in core SQL workloads and positive market response to new products like Cortex AI Search. KeyBanc Capital Markets maintained its $210 price target with an Overweight rating, citing growing momentum in Snowflake’s new product offerings and potential for margin improvements. The firm also noted that Snowflake’s ’iceberg’ feature might contribute to an upside in the fourth quarter. These developments come as Snowflake continues to expand its data warehousing solutions and enhance its AI/ML capabilities, with investors closely watching the upcoming earnings report for further insights into the company’s performance and growth trajectory.
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