On Monday, Evercore ISI increased its price target for Snowflake Inc . (NYSE:SNOW) to $250 from the previous $235, while keeping an Outperform rating on the shares. The firm's analyst pointed to a survey of 15 large Snowflake partners, suggesting a resurgence in demand for cloud data management, which may lead to higher estimates for the company in 2024.
The analyst expects Snowflake to report modestly higher F4Q revenues than the current consensus, with estimates of $754.8 million compared to the Street's $760.6 million. Operating margin predictions are also optimistic, with Evercore ISI's figure at 4.1% against a 4.9% street estimate. For the initial FY25 revenue guidance, the analyst anticipates a range of approximately 28-30%, reflecting a cautious approach due to ongoing optimization headwinds.
The report indicates that the improved macroeconomic conditions and positive feedback from partners could result in a 'beat and raise' scenario, setting the stage for upward revisions in estimates throughout the year. Despite potential volatility due to the significant year-to-date increase in share price, Evercore ISI maintains that Snowflake represents one of the top hyper-growth narratives in the software sector, looking ahead 6-9 months.
Evercore ISI's revised price target of $250 is based on a 20x enterprise value to CY25 revenue multiple, reflecting confidence in Snowflake's growth trajectory and the likelihood of an upward adjustment in FY25 and FY26 forecasts. The firm's assessment underscores a solid spending environment and the potential for revenue acceleration in FY25 for Snowflake.
InvestingPro Insights
As Snowflake Inc. (NYSE:SNOW) continues to capture the attention of analysts and investors alike, real-time data from InvestingPro provides a deeper dive into the company's financial health and market performance. With a robust market capitalization of $76.82 billion, Snowflake demonstrates its substantial presence in the cloud data management sector. Despite a negative P/E ratio of -87.51, indicating that the company is not currently profitable, analysts remain optimistic about its future. This sentiment is further supported by a significant revenue growth of 40.87% in the last twelve months as of Q3 2024, showcasing Snowflake's rapid expansion in the market.
An InvestingPro Tip that aligns with the positive outlook from Evercore ISI is the anticipated sales growth in the current year. This suggests that Snowflake's growth narrative is not only compelling but also expected to continue its upward trajectory. In addition, the company's strong return over the last week of 8.2% underscores the recent positive momentum in its share price, which could be indicative of investor confidence in the company's strategy and market position.
For those seeking more comprehensive analysis and insights, InvestingPro offers additional tips on Snowflake, including the company's cash position relative to its debt, its liquid assets coverage over short term obligations, and its trading metrics in relation to its 52-week high. To gain access to these valuable insights, readers can visit InvestingPro and use the exclusive coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. In total, there are 12 more InvestingPro Tips available that could help investors make more informed decisions regarding Snowflake Inc.
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