Snowflake stock rises toward best day since May after ‘huge’ earnings

Snowflake Inc.’s shares were It is headed for its best performance in more than six months after the software company’s latest earnings report met with a flurry of praise.

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+ 12.43%

It rose 9.6% in trading Wednesday, and is on track for its largest one-day percentage gain since May 14, when the stock rose 11.6%.

company Its profit more than doubled in the last quarter It sent what analysts considered an optimistic signal about the future pipeline.

“[L]”Big deal activity appears to be building, and international markets are gaining momentum,” Mizuho analyst Greg Moskovitz wrote. “More broadly, we maintain that SNOW’s offerings are significantly ahead of the competition at this time.”

Moskovitz entered a comment from Snowflake’s management team noting that the company had a “surprising quarter” of bookings and consumption, although some of its outperformance came from stronger-than-expected consumption by Snowflake’s largest customers. Overall, he described Snowflake’s results as “exceptional.”

“We continue to believe we are in the early stages of a strong trend in which companies will largely standardize on the SNOW platform,” Moskovitz concluded, while repeating the buy rating and $450 price target.

The company’s performance prompted Citi Research analyst Tyler Radke to upgrade Snowflake shares to buy from neutral.

Radke wrote in a note to clients.

He argued that Snowflake “could continue to ‘improve’ cadence/increases due to the significant slowdown implied in Street estimates in FY22, where only 65% ​​of product growth was recorded in Street models versus the 110% reported.” Radke raised his price target to $470 from $299.

Evercore ISI’s Kirk Matern was bullish about Snowflake’s re-acceleration in product revenue growth during what he called the company’s “wild quarter.”

“While the larger-than-expected cadence was driven by strong consumption from some of SNOW’s larger clients, the upbeat evidence of F4Q product revenue (+94-96%) helps explain that trends in the business are permanent and why Snowflake remains one of the truly unique over-growth stories in the industry. Software field.

“Snowflake will not be immune to further market volatility” if the macroeconomic landscape remains “volatile,” Mattern continued, but he likes the company’s long-term prospects. It rated the stock as outperforming, and raised its target price to $400 from $380.

Among Oppenheimer’s Ittai Kidron highs is that Snowflake posted its first quarter in positive adjusted earnings while posting a net revenue retention rate above 170%.

“We see a long path of rapid revenue increases over the next few years that is fueled by [information technology] Shifting to a cloud-based model, digital transformation, and increasing spending on [machine learning]/Data Science,” he wrote in a note to clients, while repeating his superior rating and raising his target price to $400 from $360.

Snowflake shares are up 23% so far this year as the S&P 500
SPX,
+ 1.34%

gained 21%.

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