Yahoo Finanza Snowflake Shares Slump on Wider-Than-Feared Loss
San Mateo, California-based cloud data platform provider Snowflake’s shares slumped about 9% on Wednesday after the company reported a bigger-than-expected loss in the fourth quarter.
The company, which enables customers to consolidate data into a single source to drive business insights reported a loss of $0.70 per share, compared with a $1.67 loss seen in the same period a year ago. But that was worse compared with Wall Street consensus estimates for a loss of 17 cents per share.
Snowflake shares, which fell about 18% since it started trading publicly on 16 Sept 2020, slumped another 8.7% to $247 on Wednesday.
However, revenue for the quarter jumped 117% year-over-year to $190.5 million, beating analysts’ expectations of $178.50 million. The data cloud company said its product revenue for the quarter was $178.3 million, surging 116% y/y.
“Snowflake’s revenue guidance for fiscal 2022 was more bearish than we expected. Nonetheless, adjustments we made for the year were countered with a boost from the time value of money, leading to our sustained fair value estimate of $204 per share for no-moat Snowflake,” said Julie Bhusal Sharma, equity analyst at Morningstar.
“With shares down 2% to near $242 after results, Snowflake shares are now within 3-star, fairly-valued territory, which encapsulates a wide range of share prices given our very high uncertainty rating.”
Snowflake Stock Price Forecast
Ten analysts who offered stock ratings for Snowflake in the last three months forecast the average price in 12 months of $313.33 with a high forecast of $350.00 and a low forecast of $270.00.
The average price target represents a 26.84% increase from the last price of $247.03. From those ten analysts, three rated “Buy”, seven rated “Hold” while none rated “Sell”, according to Tipranks.
Morgan Stanley gave the base target price of $270 with a high of $500 under a bull scenario and $100 under the worst-case scenario. The firm gave an “Equal-weight” rating on the data cloud company’s stock.
“The 116% YoY product revenue growth in Q4 well illustrates SNOW’s strong positioning at the confluence of Data and Cloud trends. However, the data points on ramping adoption of Data Cloud may be even more important in establishing clear competitive moats and the longer-term durability of growth,” said Keith Weiss, equity analyst at Morgan Stanley.
Several other analysts have also updated their stock outlook. Credit Suisse lowered the target price to $275 from $310. Barclays cut their stock price forecast to $270 from $295. Rosenblatt Securities initiated with a neutral rating and set the target price at $285. Citigroup raised the price objective to $325 from $300. Deutsche Bank lowered the price target to $270 from $335.
Analyst Comments
“By bringing the scalability and elasticity of the public cloud to data management, Snowflake allows customers to more easily and economically derive insight and value from their data. It’s momentum today (124% revenue growth in FY21) highlights the attractive share gain opportunity from legacy on-premise vendors that currently dominate the market, current competitive differentiation from the solutions of the public cloud vendors and the size of its potential market opportunity (broadly estimated at $56 billion as of 2019),” Morgan Stanley’s Weiss added.
“However, currently trading 50x CY22e sales vs. high-growth peers closer to 29x CY22e sales, we see success priced in already, keeping us Equal-weight.”
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This article was originally posted on FX Empire
