Snowflake (NYSE:SNOW) Sets New 12-Month High on Better-Than-Expected Earnings

Key Points

• Snowflake beat quarterly expectations: Adjusted earnings came in at $0.62 per share versus $0.45 expected, while revenue reached $1.55 billion, up 35.1% year over year and above the $1.48 billion consensus.
• AI demand is driving optimism: Management raised fiscal 2027 product-revenue guidance to $6.07 billion as AI offerings and product revenue growth strengthened, prompting several analysts to increase price targets and maintain bullish ratings.
• Profitability remains a concern: Snowflake lowered fiscal 2027 gross-margin guidance to 74% because expanding AI workloads are increasing costs, while persistent GAAP losses, stock-based compensation and elevated valuation could add downside risk.

Snowflake Inc. (NYSE:SNOW - Get Free Report) reached a new 52-week high during mid-day trading on Thursday following a better than expected earnings announcement. The stock traded as high as $384.56 and last traded at $373.5860, with a volume of 5175402 shares trading hands. The stock had previously closed at $305.84.

The company reported $0.62 earnings per share for the quarter, beating analysts' consensus estimates of $0.45 by $0.17. Snowflake had a negative net margin of 23.79% and a negative return on equity of 50.50%. The firm had revenue of $1.55 billion for the quarter, compared to analysts' expectations of $1.48 billion. During the same period in the previous year, the company earned $0.35 earnings per share. The company's quarterly revenue was up 35.1% on a year-over-year basis.

Key Snowflake News

Here are the key news stories impacting Snowflake this week:

• Positive Sentiment: Snowflake reported adjusted earnings of $0.62 per share, above the $0.45 consensus estimate, while revenue reached $1.55 billion, exceeding expectations of $1.48 billion and increasing 35% year over year. Reuters: Snowflake shares surge as AI demand powers growth and lifts outlook
• Positive Sentiment: Management raised fiscal 2027 product-revenue guidance to $6.07 billion, citing stronger-than-expected AI demand. Product revenue grew 37%, and adoption of AI offerings including the CoCo coding agent and Cortex helped reinforce the company’s AI-growth narrative. CNBC: Snowflake spikes on healthy results and AI coding momentum
• Positive Sentiment: Several analysts raised their price targets and adopted bullish ratings after the results. Targets include $424 from BTIG, $450 from DA Davidson, Canaccord and Monness Crespi & Hardt, and $488 from Citizens JMP, with ratings ranging from “buy” to “market outperform.”
• Neutral Sentiment: Snowflake’s selection by Sayari to rebuild its Commercial World Model supports the platform’s enterprise-data and AI positioning. Sayari expects the migration to reduce its data-infrastructure costs by more than 50%, although the announcement is unlikely to materially affect near-term financial results. PR Newswire: Sayari selects Snowflake
• Negative Sentiment: Management lowered fiscal 2027 gross-margin guidance to 74%, a further 100-basis-point reduction, warning that expanding AI workloads are increasing costs. This raises questions about how efficiently Snowflake can monetize rapid AI usage. Seeking Alpha: Snowflake’s hidden warning in Q2
• Negative Sentiment: At an elevated valuation, Snowflake remains exposed to disappointment if AI growth slows or margins deteriorate. Persistent GAAP losses, stock-based compensation dilution, and substantial short interest add volatility and may explain why the stock has decreased despite strong results.

Analysts Set New Price Targets

SNOW has been the subject of a number of recent research reports. Bank of America raised their target price on Snowflake from $330.00 to $395.00 and gave the stock a "buy" rating in a research report on Wednesday, August 19th. Royal Bank Of Canada reiterated an "outperform" rating on shares of Snowflake in a research note on Thursday. UBS Group lifted their price objective on Snowflake from $370.00 to $425.00 and gave the stock a "buy" rating in a report on Tuesday, August 18th. DA Davidson lifted their price objective on Snowflake from $300.00 to $450.00 and gave the stock a "buy" rating in a report on Thursday. Finally, Benchmark boosted their price objective on Snowflake from $290.00 to $360.00 and gave the company a "buy" rating in a research note on Tuesday, August 25th. Thirty-four investment analysts have rated the stock with a Buy rating, five have issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, Snowflake has an average rating of "Moderate Buy" and an average target price of $386.62.

Insider Buying and Selling at Snowflake

In other Snowflake news, Director Michael L. Speiser sold 403 shares of the stock in a transaction on Friday, August 7th. The stock was sold at an average price of $324.06, for a total transaction of $130,596.18. Following the sale, the director owned 22,573 shares in the company, valued at $7,315,006.38. This represents a 1.75% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Christian Kleinerman sold 25,000 shares of the firm's stock in a transaction on Friday, August 7th. The stock was sold at an average price of $325.00, for a total value of $8,125,000.00. Following the completion of the transaction, the executive vice president directly owned 340,379 shares of the company's stock, valued at $110,623,175. The trade was a 6.84% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 1,156,901 shares of company stock valued at $321,725,352 in the last 90 days. 4.80% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several large investors have recently added to or reduced their stakes in SNOW. Kemnay Advisory Services Inc. purchased a new position in Snowflake during the 4th quarter valued at about $28,000. Greenline Wealth Management LLC purchased a new stake in shares of Snowflake in the fourth quarter worth about $29,000. Basecamp Wealth Advisors LLC lifted its holdings in shares of Snowflake by 140.5% in the first quarter. Basecamp Wealth Advisors LLC now owns 202 shares of the company's stock worth $30,000 after buying an additional 118 shares in the last quarter. Emerald Advisers LLC boosted its position in shares of Snowflake by 95.2% in the first quarter. Emerald Advisers LLC now owns 205 shares of the company's stock valued at $31,000 after acquiring an additional 100 shares during the period. Finally, MV Capital Management Inc. bought a new position in shares of Snowflake in the fourth quarter valued at approximately $32,000. Institutional investors own 65.10% of the company's stock.

Snowflake Trading Up 21.9%

The firm's 50 day moving average is $293.26 and its 200 day moving average is $218.27. The company has a market cap of $129.26 billion, a PE ratio of -107.32 and a beta of 1.33. The company has a debt-to-equity ratio of 1.18, a current ratio of 1.05 and a quick ratio of 1.05.

About Snowflake

Snowflake Inc is a cloud-native data platform company that provides a suite of services for storing, processing and analyzing large volumes of data. Its core offering, often described as the Snowflake Data Cloud, combines data warehousing, data lake and data sharing capabilities in a single managed service delivered across major public cloud providers. The platform is designed to support analytics, data engineering, data science and application workloads with a focus on scalability, concurrency and simplified administration.

Key products and capabilities include a multi-cluster, shared-data architecture that separates compute from storage; continuous data ingestion and streaming; support for structured and semi-structured data formats; tools for data governance, security and compliance; and developer frameworks for building data applications.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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