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On Thursday, Evercore ISI updated its outlook on Snowflake Inc . (NYSE: NYSE:SNOW), increasing the price target to $230 from $200 while maintaining an Outperform rating. The revision follows Snowflake’s fourth-quarter earnings, which exceeded management’s guidance and analyst expectations. Snowflake reported product revenue of $943.3 million, a 28% increase year-over-year, surpassing the projected range of $906-911 million. Operating margins also impressed at 9%, compared to the anticipated 4%. With a current market capitalization of $54.9 billion, Snowflake has demonstrated strong momentum, achieving a 43.8% price return over the past six months according to InvestingPro data.
The firm’s analysts highlighted Snowflake’s forward guidance as a significant positive, with a forecast of $4,280 million in product revenue for FY26, representing a 24% growth rate. This figure is notably higher than the Street’s expectation of $4,234 million. Operating margin guidance for FY26 also surpassed expectations, set at 8% versus the Street’s forecast of 7.1%. These factors contributed to Snowflake shares rising approximately 10% in after-hours trading. InvestingPro analysis indicates the company maintains a strong financial position with liquid assets exceeding short-term obligations and operates with a moderate debt level, though it currently trades above its Fair Value.
Management’s commentary revealed stable consumption patterns, with technology customers performing beyond expectations and robust adoption of new data engineering and AI capabilities. Financial services remained the leading vertical, and the EMEA region was a source of strength for the company. Additionally, the potential of Iceberg, a new product offering, was recognized as a positive influence that could attract more workloads to Snowflake’s platform.
In executive news, CFO Mike Scarpelli has signaled his intention to retire following the appointment of his successor, although the timeline for this transition remains unspecified. Despite Scarpelli’s pending departure, Evercore ISI’s analysts are confident in Snowflake’s ability to sustain strong growth and margin expansion.
The analysts concluded that Snowflake’s stable revenue growth in the mid-20% range, coupled with expanding margins, could lead to an increase in the company’s stock multiple. They also anticipate that the company’s net revenue retention (NRR) rate will stabilize in the mid-120% range. With newer products like Snowpark and Cortex expected to gain traction in the second half of the year, there is potential for upward revisions to Snowflake’s guidance as the year progresses. Discover more insights about Snowflake’s valuation and growth prospects in the comprehensive Pro Research Report, available exclusively on InvestingPro, along with 8 additional ProTips and extensive financial metrics.
In other recent news, Snowflake Inc. has reported strong fourth-quarter earnings, surpassing expectations and prompting several analysts to adjust their outlooks. Cantor Fitzgerald raised its price target to $228, highlighting the company’s significant fourth-quarter performance, which marked a 3.8% beat, and noted that Snowflake’s consumption trends and Snowpark’s contributions were key factors. Raymond (NSE:RYMD) James also increased its price target to $196 following the earnings report, emphasizing the positive impact of Iceberg tables on Snowflake’s workload processing. Piper Sandler raised its target to $215, crediting robust consumption strength and triple-digit growth in new products like Snowpark.
Jefferies maintained a Buy rating with a $220 target, noting a 28% year-over-year increase in product revenue and expressing confidence in Snowflake’s fiscal year 2026 guidance. Citizens JMP raised its target to $201, citing Snowflake’s product differentiation and a growing partner ecosystem as crucial to its success. The integration of OpenAI into Snowflake Cortex and a strengthened partnership with Microsoft (NASDAQ:MSFT) were also highlighted as key developments. Additionally, the upcoming retirement of CFO Michael Scarpelli was announced, with plans for a gradual transition to his successor. These developments reflect the company’s ongoing strategic growth and innovation in the data management market.
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