Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Here’s Why Snowflake Is About To Take Off

By (Sam Quirke )Stock MarketsFeb 10, 2022 12:03PM ET
Here’s Why Snowflake Is About To Take Off
By (Sam Quirke )   |  Feb 10, 2022 12:03PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Although Snowflake (NYSE:SNOW) reported impressive earnings last December, its shares got caught up in the wave of selling seen across equity markets for much of the past month or so.

They were down as much as 40% from November’s high through the end of January, and investors must have been scratching their heads at what else was needed to drive a bid.

The company’s third-quarter revenue was up 110% year on year, with remaining performance obligations also up an impressive 94% on the year. In addition, the data management giant managed to post a net revenue retention rate of 173%. By any measure, these are stellar headline prints for a $90 billion company to be taking with it into 2022, a year that’s forecasted to be a tough one for tech and growth stocks.

But for all that, down shares came in the aftermath of the report until they put in what is now looking like a low in the final few days of January. Since then, they’ve popped 25% and look set to take the highway back towards November’s highs. More than a few voices on Wall Street are calling this a spectacular buying opportunity, so let’s take a look at what could be in store in the coming weeks.

Recent Upgrades

For starters, we have a fresh upgrade from the team over at Morgan Stanley who on Monday of this week moved their rating on Snowflake shares to Overweight. Analyst Keith Weiss wrote in a note to clients that:

“leveraging the elasticity, scalability, and performance of the public cloud, Snowflake’s cloud data platform enables its customers to eliminate data silos while reducing overhead, complexity, and infrastructure management costs, thereby allowing them to focus on driving and sharing insights from their data.”

His $390 price target suggests there’s at least 30% upside to be had from where shares closed on Tuesday and were they to hit that would be within touching distance of their November high.

Weiss also pointed out that in the 16 months since Snowflake started trading publicly, their value has only become more appreciated by their customers. The Montana headquartered company is now in a good position to build on this, drive traction, and expand its total addressable market.

His bullishness echoes that of analyst Mark Schappel from Loop Capital, who in the last week of January also upgraded Snowflake shares from Hold to a Buy.

Schappel believed the fall seen in shares since December was overdone, “disconnected” from the fair valuation, and slapped a fresh price target of $370 onto them. In a note to clients, he wrote:

“As far as ‘growth’ names are concerned, we believe Snowflake is exposed to one of the largest and fastest-growing total addressable markets, leveraged to favorable secular trends in the cloud data warehousing market, has a solid competitive position and an excellent track record of execution as a public company”.

Attractive Entry Point

This should be enough for many investors on the sidelines to consider getting involved, but Snowflake also has the team at William Blair, Barclays, and Citigroup) on their side. All three have come out with upgrades and bullish comments on Snowflake’s long-term potential in the past two months. {0|Barclays}} thought the selling was overdone by the middle of January and felt even at that point, it gave investors an “attractive entry point.”

Their peers at Citigroup (NYSE:C) boosted their price target on the stock to $470 after their earnings in December, which, even after the recent pop in shares, still points to an upside of more than 60% from current levels.

With all that in mind, there’s really not a lot to dislike about Snowflake right now. In the face of rising interest rates, they’re a growth stock that’s still churning out triple-digit percentage growth, and more than a few of the sell-side heavyweights have joined the bull camp in recent weeks. In light of the recent bout of selling, you can’t help but feel there’s a discount to be had at current prices, and a run back towards all-time highs in the coming weeks is quite likely.

SNOW Daily Chart
SNOW Daily Chart

Original Post

Here’s Why Snowflake Is About To Take Off

Related Articles

Here’s Why Snowflake Is About To Take Off

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Frank Wyler
Frank Wyler Mar 03, 2022 3:14AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Other analysts’ bullishness does not a bullish case make.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email