Snowflake earnings: what to watch
Snowflake (SNOW) is due to report its first quarter results after the close today (May 26th). Shares in the company are worth about a half of the value they were at their peak in 2020.
The consensus estimate for Q1 is $213.36m in revenue and a $0.16 loss per share. In Q4, Snowflake posted a loss per share of $0.70 on a 117% rise in revenues of $190.5 million.
Goldman Sachs put out a note yesterday on the stock, giving it a buy rating with a 12-month price target of $275. “Following a ~40% correction in the stock since its December 2020 highs, we see a path towards outperformance and believe the durability of growth is not fully reflected in the company’s valuation,” they said.
Snowflake is seen as being well-positioned to capitalize on a “generational shift” in data and analytics to the cloud, and replace incumbent data warehousing solutions “owing to their scalable and elastic cloud native”. GS added: “We continue to expect another strong quarter as the overall demand environment remains resilient.”
Analysts maintain a broadly positive stance on the stock, with 50/50 buy/hold ratings.
Price action has been positive of late although we have seen the momentum just fade a little as it approached the April swing highs around $244. The beak of the trendline from the Dec ‘20, Feb ‘21 and Apr ‘21 peaks suggests bulls are taking charge again. MACD crossover also seen as bullish.