Tuesday, Snowflake Inc . (NYSE: NYSE:SNOW) received a vote of confidence from Citi as the firm reiterated a Buy rating and a $240.00 price target on the cloud-based data platform. The endorsement comes as Snowflake approaches its first-quarter earnings report, with expectations set for a robust performance and an optimistic guide for the second quarter.
Citi's stance is based on what it perceives as a sufficiently de-risked scenario for Snowflake, which could lead to financial results surpassing expectations.
The analyst from Citi highlighted the company's strong booking numbers in the fourth quarter as a foundation for growth in the first half of the year. Despite acknowledging mixed feedback regarding the competitive landscape, the firm is buoyed by positive customer reactions to Snowflake's new products, which could contribute to surpassing fiscal year 2025 estimates.
The analyst pointed out that current investor sentiment towards Snowflake is mixed to negative. However, the firm anticipates that the stock will gain traction leading into Snowflake's upcoming analyst day and Summit in June 2024. The events are expected to be product-centric and are predicted to shed light on the long-term vision of the new CEO, Frank Slootman.
Snowflake's upcoming analyst day and Summit are anticipated to provide investors with a clearer picture of the company's direction under CEO Slootman's leadership. The company's focus on product development and innovation is expected to be a key theme during these events.
InvestingPro Insights
As Snowflake Inc. heads into its first-quarter earnings report, several financial metrics from InvestingPro suggest key points investors may want to consider. With a market capitalization of $55.03 billion, Snowflake's growth narrative is reflected in its revenue growth of nearly 35.86% over the last twelve months as of Q4 2024. This aligns with Citi's positive outlook and the company's strong bookings from the previous quarter.
InvestingPro Tips highlight that Snowflake has more cash than debt on its balance sheet and its liquid assets exceed short-term obligations, providing the company with a solid liquidity position. Moreover, analysts predict the company will turn profitable this year, which could be a pivotal moment for Snowflake as it continues to innovate and expand its product offerings. However, it's important to note that Snowflake is currently trading at a high revenue valuation multiple and a high Price/Book multiple of 10.62, indicating that the market has high expectations for its future growth.
Investors looking for a deeper analysis can find additional insights on Snowflake with more InvestingPro Tips available at https://www.investing.com/pro/SNOW. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and explore the full spectrum of financial analytics and expert commentary that InvestingPro has to offer.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.