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Snowflake (SNOW)
NYSE:SNOW
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Snowflake
(NYSE:SNOW)
63Neutral
Positive Factors
Market Positioning
Snowflake is gaining share in an $80B+ DBMS market, while expanding its TAM through new use cases in data engineering and AI/ML.
Product Development
Snowflake introduced over 400 new capabilities, appealing to data engineers and scientists, indicating product appeal.
Stock Performance
SNOW is currently up 5.5% YTD, vs. the IGV Index decline of 3.7%, indicating strong stock performance relative to the market.
Negative Factors
AI Competition
There are risks that the company may not be as well positioned as hyperscalers in capitalizing on generative AI opportunities.
Executive Changes
CFO Mike Scarpelli announced his retirement sooner than expected.
Revenue Guidance
Initial FY26 product revenue guidance leaves significantly less room for upside than FY25 guidance, and consumption-based revenue recognition may face macro pressures.
Snowflake (SNOW) vs. S&P 500 (SPY)
Market Cap
$49.96B
Dividend YieldN/A
Average Volume (3M)6.50M
Price to Earnings (P/E)―
Beta (1Y)1.65
Revenue Growth29.21%
EPS Growth-51.47%
CountryUS
Employees7,834
SectorTechnology
Sector Strength43
IndustrySoftware - Application
Share Statistics
EPS (TTM)-3.86
Shares Outstanding334,100,000
10 Day Avg. Volume3,997,019
30 Day Avg. Volume6,503,611
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)15.31
Price to Cash Flow (P/CF)128.50
P/FCF Ratio167.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$209.56Price Target Upside49.79% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering39
Snowflake Business Overview & Revenue Model
Company DescriptionSnowflake Inc. provides a cloud-based data platform in the United States and internationally. The company's platform offers Data Cloud, which enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data. Its platform is used by various organizations of sizes in a range of industries. The company was formerly known as Snowflake Computing, Inc. and changed its name to Snowflake Inc. in April 2019. Snowflake Inc. was incorporated in 2012 and is based in Bozeman, Montana.
How the Company Makes MoneySnowflake makes money primarily through a consumption-based revenue model. Customers are charged based on the amount of data stored and the computing resources used on its platform. This model includes charges for data storage, data transfer, and computing resources consumed during data processing and analysis. Snowflake also generates revenue from its data marketplace, where customers can purchase third-party data sets. Key partnerships with major cloud service providers like AWS, Microsoft Azure, and Google Cloud enhance Snowflake's service offerings and expand its customer reach, contributing significantly to its earnings.
Snowflake Financial Statement Overview
Summary
Snowflake demonstrates strong revenue growth and sound cash flow management, but profitability remains a challenge due to high operating expenses and strategic investments. The balance sheet is robust, but high liabilities compared to equity must be managed carefully.Income Statement
Snowflake shows robust revenue growth with a 29.23% increase from last year, indicating strong demand and market presence. However, the company is currently operating at a loss with a negative EBIT margin of -40.14% and a net profit margin of -35.46% in TTM, reflecting high operating expenses and significant strategic investments to drive growth.65
Positive
Balance Sheet
The balance sheet reflects a healthy equity position with an equity ratio of 34.13%. Snowflake has a manageable debt-to-equity ratio of 0.87, suggesting moderate leverage. However, high liabilities compared to equity may pose financial risks if not managed carefully.70
Positive
Cash Flow
Snowflake's cash flow is strong with operating cash flow exceeding net income, indicating efficient cash management. The free cash flow to net income ratio is favorable, and free cash flow increased by 20% year-over-year, suggesting robust liquidity and potential for reinvestment.75
Positive
| Breakdown | ||||
| Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.63B | 2.81B | 2.07B | 1.22B | 592.05M | Gross Profit |
| 2.41B | 1.91B | 1.35B | 760.89M | 349.46M | EBIT |
| -1.46B | -1.09B | -842.27M | -715.04M | -543.94M | EBITDA |
| -1.10B | -974.87M | -783.63M | -693.54M | -534.11M | Net Income Common Stockholders |
| -1.29B | -836.10M | -797.53M | -679.95M | -539.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.64B | 3.85B | 4.01B | 3.85B | 3.91B | Total Assets |
| 9.03B | 8.22B | 7.72B | 6.65B | 5.92B | Total Debt |
| 2.69B | 287.98M | 251.66M | 206.30M | 204.54M | Net Debt |
| 56.47M | -1.47B | -688.24M | -879.43M | -615.64M | Total Liabilities |
| 6.03B | 3.03B | 2.25B | 1.60B | 985.27M | Stockholders Equity |
| 3.00B | 5.18B | 5.46B | 5.05B | 4.94B |
| Cash Flow | Free Cash Flow | |||
| 913.49M | 750.16M | 495.80M | 56.85M | -94.12M | Operating Cash Flow |
| 959.76M | 848.12M | 545.64M | 110.18M | -45.42M | Investing Cash Flow |
| 190.65M | 832.26M | -597.88M | -20.80M | -4.04B | Financing Cash Flow |
| -226.52M | -854.10M | -92.62M | 178.20M | 4.78B |
Snowflake Technical Analysis
Negative
139.90
Price Trends
168.70
Negative
164.84
Negative
143.33
Negative
Market Momentum
-4.88
Positive
39.01
Neutral
19.95
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNOW, the sentiment is Negative. The current price of 139.9 is below the 20-day moving average (MA) of 152.57, below the 50-day MA of 168.70, and below the 200-day MA of 143.33, indicating a bearish trend. The MACD of -4.88 indicates Positive momentum. The RSI at 39.01 is Neutral, neither overbought nor oversold. The STOCH value of 19.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SNOW.
Snowflake Risk Analysis
Snowflake disclosed 54 risk factors in its most recent earnings report. Snowflake reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Snowflake Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $60.74B | 116.77 | 6.15% | ― | 16.94% | -62.24% | |
70 Outperform | $54.77B | 50.18 | 49.69% | ― | 12.35% | 22.28% | |
67 Neutral | $27.53B | 6,151.40 | 0.29% | ― | 21.07% | ― | |
66 Neutral | $34.64B | 198.07 | 7.75% | ― | 26.12% | 274.50% | |
63 Neutral | $49.96B | ― | -31.43% | ― | 29.21% | -51.47% | |
59 Neutral | $51.97B | ― | -32.59% | ― | 23.19% | 11.01% | |
57 Neutral | $20.94B | 10.43 | -13.41% | 2.52% | 4.53% | -23.34% |
* Technology Sector Average
Performance Comparison
SNOW
Snowflake
130.53
-23.33
-15.16%
ADSK
Autodesk
245.51
0.77
0.31%
WDAY
Workday
217.14
-51.18
-19.07%
HUBS
HubSpot
501.50
-168.50
-25.15%
TEAM
Atlassian
187.67
-8.95
-4.55%
DDOG
Datadog
87.93
-36.47
-29.32%
Snowflake Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -15.82% | Next Earnings Date: May 21, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, high net revenue retention, significant product innovation, and expanded AI capabilities. However, there were challenges, including large customers exceeding contract capacity and needing to purchase on-demand, slower projected growth for Q1 due to leap year effects, and high stock-based compensation. Overall, the sentiment is positive given the strong growth and innovation, although tempered by some challenges.Highlights
Strong Revenue Growth
Product revenue for Q4 was $943 million, up 28% year-over-year, with remaining performance obligations totaling $6.9 billion, growing 33% year-over-year.
High Net Revenue Retention
Net revenue retention was a healthy 126%, indicating strong customer satisfaction and continued usage.
New Product Introductions
Snowflake introduced over 400 product capabilities to market, more than double the previous year, showing strong product innovation.
Positive Cash Flow and Margins
Q4 non-GAAP operating margin increased to 9%, and non-GAAP adjusted free cash flow margin was 43%.
Expansion of AI Capabilities
Introduced Cortex AI and expanded partnerships with Microsoft to incorporate OpenAI's models, making Snowflake the only platform hosting both Anthropic's and OpenAI's models.
Lowlights
Large Customers Exceeding Contract Capacity
Several large customers ran out of capacity before their contract end date, choosing to purchase as they consume rather than renewing.
Q1 Revenue Growth Projections
Q1 product revenue is expected to grow only 21% to 22% year-over-year, partially due to the impact of leap year.
Stock-Based Compensation
Stock-based compensation as a percentage of revenue is expected to decrease from 41% to 37% in FY '26, which remains relatively high.
Company Guidance
During Snowflake's Q4 fiscal 2025 earnings call, the company provided guidance for the first quarter and full year of fiscal 2026. Product revenue for Q1 is expected to be between $955 million and $960 million, reflecting a year-over-year growth of 21% to 22%. For the full fiscal year 2026, Snowflake anticipates product revenue of approximately $4.28 billion, representing a 24% year-over-year increase. The company also expects a non-GAAP operating margin of 5% in Q1, with FY '26 non-GAAP operating margin expanding to 8% and non-GAAP adjusted free-cash flow margin at 25%. Additionally, Snowflake forecasts its stock-based compensation as a percentage of revenue to decrease to approximately 37% from 41%, indicating an ongoing effort to improve efficiency and leverage AI for operational gains.Snowflake Corporate Events
Executive/Board Changes
Snowflake CFO Michael Scarpelli Announces Retirement
Neutral
Feb 26, 2025
On February 25, 2025, Snowflake Inc. announced that its Chief Financial Officer, Michael P. Scarpelli, intends to retire. The company is actively searching for his successor. Scarpelli will remain in his role until a successor is appointed and will then transition to an advisory role to ensure a smooth transition. A consulting agreement has been established for Scarpelli to serve as an independent contractor for 12 months post-departure, with his equity awards continuing to vest during this period.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.