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On Thursday, Stifel analysts demonstrated confidence in Snowflake Inc . (NYSE:SNOW) by raising the company’s price target from $210.00 to $220.00, while reiterating a Buy rating on the stock. This adjustment reflects the firm’s positive outlook on Snowflake’s financial performance and future prospects. According to InvestingPro data, the stock is currently trading near its Fair Value, with technical indicators suggesting overbought conditions. The stock has shown strong momentum, gaining 16% year-to-date.
Snowflake reported a robust first quarter, with product revenue surpassing estimates by 4%, which was above the expected 3% increase. The company’s newer products, such as Snowpark and Dynamic tables, contributed to this outperformance, showing no significant impact from broader economic conditions and demonstrating strong consumption across the board. With a market capitalization of $59.76 billion and impressive revenue growth of 29.21% over the last twelve months, InvestingPro analysis reveals 8 additional key metrics and insights available for subscribers.
The company’s bookings also showed signs of health, with committed remaining performance obligations (cRPO) climbing by approximately $50 million quarter-over-quarter. This marks the first sequential increase in the first quarter since FY23. Notably, two major customers who had previously chosen on-demand services signed contracts valued at over $100 million.
Operating margin (OM) was approximately 350 basis points better than anticipated, with operating expenses growing only 15% year-over-year. This growth rate has been trending down from 36% in the first quarter of FY25. Stifel analysts attribute this improvement to efficiencies gained from changes in Snowflake’s research and development hiring strategies. They anticipate that the company will sustain these margin gains and potentially see accelerating operating margins in the years ahead.
Looking forward, Stifel expects Snowflake to continue its momentum with a growing backlog, increased adoption of new products, and operational efficiency. These factors are projected to enable the company to maintain mid-to-upper 20% growth in product revenue and free cash flow, along with margin expansion in the coming years. While currently not profitable, InvestingPro analysts forecast profitability this year, with a strong gross profit margin of 66.72%. Get access to the comprehensive Pro Research Report covering Snowflake and 1,400+ other top stocks for deeper insights into the company’s financial health and growth potential.
In other recent news, Snowflake Inc. has reported strong financial results for the first quarter of fiscal year 2026, with product revenue significantly surpassing expectations. The company achieved product revenue of $997 million, exceeding Loop Capital’s forecast by 4%. In response to these results, several firms have raised their price targets for Snowflake. Cantor Fitzgerald increased its target from $183 to $242, Needham adjusted its target from $215 to $230, and DA Davidson raised its target from $200 to $250. Loop Capital also revised its target to $220, while Raymond (NSE:RYMD) James set a new target of $212.
Analysts have expressed confidence in Snowflake’s growth trajectory and its ability to exceed financial forecasts. Cantor Fitzgerald maintained an Overweight rating, citing Snowflake’s "beat-and-raise" approach, while Needham highlighted the company’s strategic investments in personnel. DA Davidson noted the rapid adoption of Snowflake’s AI and machine learning products as a key driver of revenue growth. Raymond James emphasized the strong traction of Snowflake’s AI tools, although they expressed some caution regarding potential macroeconomic risks.
Snowflake’s management has provided guidance for the fiscal year, projecting a year-over-year growth outlook from 24% to 25%. The company’s performance and strategic initiatives have led analysts to maintain positive ratings and increase price targets, reflecting confidence in Snowflake’s continued success in the software industry.
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