Shares of cloud firm Snowflake (NYSE:SNOW) are down in today’s trading as investors await its Q1 earnings results on May 22 after the market closes. Analysts are expecting earnings per share to come in at $0.18 on revenue of $785.9 million. This equates to 20% and 25.9% year-over-year increases, respectively, according to TipRanks’ data.
Ideally, earnings per share should grow faster than revenue as this demonstrates a high degree of operating and financial leverage in the business. Nevertheless, it’s worth noting that Snowflake has beaten earnings estimates every quarter since its 2021 Q4. Therefore, it’s possible that EPS growth will outpace revenue growth.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you. Indeed, it currently says that options traders are expecting a large 10.31% move in either direction.
Is Snowflake a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SNOW stock based on 27 Buys, 10 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 9.4% decline in its share price over the past year, the average SNOW price target of $208 per share implies 28.65% upside potential.
Is It Wise to Allocate $1,000 Toward SNOW Stock Right Now?
Before you hurry to invest in SNOW, think about the following:
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