Shares of Snowflake (NYSE:SNOW) plunged at the time of writing after downgrading its fiscal year outlook. This prompted questions among Wall Street analysts about the firm’s future. The adjustment, marking Snowflake’s second consecutive forecast cut, attributes slowing consumption growth to existing clients fine-tuning their usage. Analysts, including Wedbush Securities’ Taz Koujalgi and Rosenblatt Securities’ Blair Abernethy, voiced concerns about the revised projections and the dwindling clarity on the company’s path ahead.
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Snowflake now forecasts a full-year product revenue of around $2.6B, falling short of the initial estimate of $2.71B, with an adjusted operating margin dropped to 5% from the previous 6%. The next quarter’s product revenue growth is also expected to underperform, only expanding 33%-34% year-over-year, below anticipated figures.
Despite this, TD Cowen’s J. Derrick Wood and J.P. Morgan’s Mark Murphy maintain their optimism about the company’s performance in the longer term. Snowflake’s recent acquisition of search startup Neeva and its innovative solutions also provide promising growth opportunities.
Overall, Wall Street has a consensus price target of $189.95 on SNOW stock, implying 27.77% upside potential, as indicated by the graphic above.
