S&P 500   4,538.43
DOW   34,580.08
QQQ   383.13
S&P 500   4,538.43
DOW   34,580.08
QQQ   383.13
S&P 500   4,538.43
DOW   34,580.08
QQQ   383.13
S&P 500   4,538.43
DOW   34,580.08
QQQ   383.13

Snowflake (NYSE: SNOW) Starts To Look Hot

Wednesday, May 19, 2021 | Sam Quirke
Snowflake (NYSE: SNOW) Starts To Look HotWhile the tech heavy NASDAQ index continues to drop, shares of data warehousing company Snowflake (NYSE: SNOW) are going from strength to strength. In a way, it’s business as normal for them. Having IPO’d last September, they rode the wave of risk-on euphoria that was rampant across equities towards the end of last year and soon found themselves up more than 70% in less than three months. 

But so too did they suffer in the first quarter of 2021 as increasing inflation fears sent interest rates flying higher. From those highs of December, they got a rude awakening and fell 50% into the end of March before going on to hit all time lows earlier this month. But with Q1’s earnings report due towards the end of May, Snowflake shares are at the start of what looks like a potential fresh rally

Wall Street hasn’t been slow about pointing out the solid longer-term opportunity on hand right now and for those of us looking to build exposure to the tech sector in portfolios even as the broader market continues to trade softly, Snowflake offers an interesting opportunity. 

Multiple Upgrades

Late last week Goldman Sachs upgraded shares from Neutral to a Buy, on the back of Snowflake being "well positioned to capitalize on a generational shift". They upped their price target to $275 which even from Tuesday’s closing price still suggests upside of more than 20%. In a note to clients, they said they see Snowflake as being well positioned for the "shift of data and analytics to the cloud with strong secular tailwinds including cloud adoption, big data, AI/ML, and secure data sharing."

The 18% that shares have run-up in the past week has also been fuelled by similar bullish comments from Rosenblatt who only yesterday also upgraded Snowflake shares to a Buy while giving them a fresh price target of $285. Analyst Blair Abernethy has high hopes for the company’s upcoming earnings report and expects Snowflake to either “meet or beat the firm's 93% year-over-year product growth revenue estimate, confidence driven by the healthy IT spending environment and strong performance among Snowflake’s cloud services peers.” Abernethy wasn’t afraid to also observe that Snowflake’s valuation, even with the recent dip, is at the upper end of its enterprise software peer group, but feels it’s somewhat justified by the fact they’re growing at a much faster than average pace.

Indeed, this higher than usual valuation didn’t stop Stephen Mandel’s Lone Pine Capital from adding to their Snowflake position in their latest 13F filing, released this week. Mandel and his team are obviously viewing the fall from last December’s highs as a massive buying opportunity and those of us on Main Street could do worse than following them into the trade as Lone Pine Capital aren’t the only heavyweights taking advantage of the discounted share price. This week has also had a 13F filing from Melvin Capital, which showed the fund initiating a new position in Snowflake shares over the past few weeks. 

Getting Involved

Even though Snowflake is burning through a significant amount of cash, and is in fact losing money per customer right now, their pace of their growth and future prospects seem to more than makeup for that. Like with Netflix (NASDAQ: NFLX) and Tesla (NASDAQ: TSLA) in the past, Wall Street is of the opinion that you have to break eggs to make an omelette, or in other words, spend a ton of cash to get profitable. March’s earnings report had revenue up 117% year on year and investors will be hoping May’s report reaffirms the pace at which Snowflake is growing and by doing so confirms the long term potential.

Shares are moving strongly up off their lows from last week and are back trading in the channel where they consolidated after Q1’s drop. With a bullish MACD crossover just after being logged and the stock’s RSI moving quickly off the 30 level, the buy-the-dip opportunity on this one is real and mightn’t be around for much longer.
Snowflake (NYSE: SNOW) Starts To Look Hot

Should you invest $1,000 in Snowflake right now?

Before you consider Snowflake, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Snowflake wasn't on the list.

While Snowflake currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Snowflake (SNOW)2.1$345.11-4.2%N/A-113.15Buy$360.41
Compare These Stocks  Add These Stocks to My Watchlist 


Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.