Snowflake (SNOW) shares have plunged 18.1% in the trailing 12 months, underperforming the Zacks Computer & Technology sector’s appreciation of 30.8% and the Zacks Internet – Software industry’s return of 32.3%.SNOW has been suffering from stiff competition from companies like Databricks, increasing pricing pressures and growing GPU-related costs as it aggressively invests in AI initiatives.One-Year Performance Image Source: Zacks Investment Research SNOW is currently overvalued, as suggested by the Value Sc ...

Core Viewpoint - Snowflake Inc. is experiencing significant market attention due to the formation of a Golden Cross, indicating bullish momentum in its stock performance [1][6]. Technical Analysis - The current stock price of $168.97 shows strong momentum, significantly above the 50-day SMA of $138.86 and the 200-day SMA of $138.20 [2]. - The MACD indicator is at a bullish 10.42, supporting the stock's upward trend [2]. - Short-term signals are mixed, with the eight-day SMA at $174.70 indicating selling pressure, while the 20-day SMA at $167.46 suggests a bullish signal, indicating potential near-term consolidation [3]. - The RSI stands at 60.03, placing Snowflake in neutral territory and allowing for further upward movement [3]. Analyst Insights - Jefferies has raised its price target for Snowflake to $200, highlighting the company's focus on AI product development as a key driver for future revenue growth [4]. - Other analysts are optimistic as well, with KeyBanc setting a price target of $210 and Citi raising its target to $225, citing a "redemption quarter" for the company [5]. - Analysts emphasize Snowflake's ability to leverage the increasing demand for data and AI-driven solutions, aligning with the industry's digital transformation trends [5]. Long-Term Growth Potential - The combination of strong technical indicators and positive analyst sentiment positions Snowflake for long-term growth in the evolving data landscape [6].

Group 1 - The stock of Snowflake (NYSE: SNOW) has increased by 40% since the last coverage, indicating a favorable outlook with potential for additional upside [1] - Snowflake's FY2025 guidance has been revised, and the company reported a 29% year-over-year growth in product revenue [1] Group 2 - The analysis emphasizes a focus on GARP/Value stocks, which are characterized as high-quality, reasonably priced businesses with strong competitive advantages and significant growth potential [1] - The investment strategy prioritizes fundamentals and seeks stocks trading at a discount to intrinsic value, ensuring a clear margin of safety [1] - The long-term investment approach aims for wealth accumulation through compounding over a period of 5-7 years while emphasizing downside protection [1]

Core Insights - The article discusses the investment positions of Parkev Tatevosian, CFA, and mentions that The Motley Fool has positions in and recommends Nvidia and Snowflake [1] Company Positions - Parkev Tatevosian has no position in any of the stocks mentioned [1] - The Motley Fool has a disclosure policy regarding its investment positions [1] Compensation and Affiliations - Parkev Tatevosian is an affiliate of The Motley Fool and may receive compensation for promoting its services [1] - If subscriptions are made through his link, he will earn additional income that supports his channel [1]

Group 1: Company Performance - Snowflake's stock has shown signs of recovery following a solid earnings report, despite a challenging year marked by the unexpected retirement of its CEO [1][2] - The company reported third-quarter revenue of $942 million, exceeding expectations of $897 million, and adjusted earnings per share of $0.20, surpassing the forecast of $0.15 [4] - Year-over-year revenue growth was 28%, but the cost of sales increased by over 40%, leading to a net loss that grew from $214.3 million a year ago to $324.3 million this quarter [4] Group 2: Profitability Concerns - Snowflake has not yet demonstrated a clear path to profitability, which raises concerns despite growth opportunities in cloud operations and AI [3][8] - The company's reliance on stock-based compensation, totaling $363.3 million last quarter (up 22% year-over-year), is significant for its cash flow and adjusted earnings, but it can mislead investors regarding true profitability [5][7] - The increasing losses, despite growing revenue, indicate a potential red flag, as efficiency improvements and a path to profitability are expected at this stage of growth [8][9] Group 3: Market Position and Risks - Snowflake operates in a competitive environment where many AI stocks are performing well, yet it remains in negative territory for the year [1][2] - The gross profit margin is around 66%, but significant reductions in overhead and operating expenses are necessary for the company to approach breakeven [9]

Core Insights - Snowflake's stock surged 52.2% in November, following a 15% increase in the first half of the month, primarily driven by positive Q3 fiscal results reported on November 20 [1][2] Group 1: Financial Performance - Despite a strong performance in November, Snowflake's stock is down 42% year-to-date, reflecting investor concerns over slowing growth and rising expenses [2] - In Q3, Snowflake added 400 new customers, including 20 from the Forbes Global 2000, and saw a 25% increase in customers spending $1 million or more annually [3] - Product revenue for the first three quarters of fiscal 2025 increased nearly 31% compared to the same period in fiscal 2024, with Q4 revenue expected to grow 23% year-over-year, leading to an overall 29% growth for the year [8][9] Group 2: Strategic Insights - Management attributed recent growth to advancements in artificial intelligence (AI), which is seen as a key factor in revitalizing the company's growth trajectory [4][7] - Snowflake's long-term goal of achieving $10 billion in annual product revenue by fiscal 2029 was at risk due to declining growth rates, but recent metrics indicate a potential turnaround [6] - Remaining performance obligations increased by 55% year-over-year in Q3, suggesting that customers are willing to commit more spending to Snowflake's products [7]

Investment Rating - The report maintains an "Overweight" rating for the company [4]. Core Insights - The company's overall performance exceeded expectations with strong order growth, reporting total revenue of $942.1 million for FY2025Q3, a year-over-year increase of 28%, surpassing Bloomberg consensus by 4.8% [3]. - The remaining performance obligations (RPO) reached $5.7 billion, reflecting a year-over-year growth of 55% [3]. - Non-GAAP product gross profit was $686.9 million, with a gross margin of 76%, down 2 percentage points year-over-year [3]. - The company has a robust customer base, with 542 customers generating over $1 million in product revenue over the past 12 months, an increase of 25% year-over-year [3]. - The company signed contracts worth over $350 million in total contract value, with management expecting this momentum to continue into Q4 [3]. - The adoption of AI products is favorable, with over 1,000 AI and ML use cases deployed, and more than 3,200 accounts utilizing Snowflake's AI and ML capabilities [3]. Financial Summary - For FY2025, the company raised its revenue and profit guidance, projecting product revenue for FY2025Q4 to be between $906 million and $911 million, a year-over-year increase of 23% [3]. - The full-year product revenue forecast was adjusted from $3.356 billion to $3.430 billion, reflecting a year-over-year growth of 29% [3]. - Non-GAAP operating profit margin is expected to be 5%, up from a previous estimate of 3% [3]. - Key financial metrics for FY2024A to FY2027E include: - Revenue growth rates of 35.9% for FY2024A, 27.6% for FY2025E, 22.7% for FY2026E, and 22.8% for FY2027E [5]. - Adjusted net profit for FY2025E is projected at $249 million, a decrease of 29.5% year-over-year [5]. - Adjusted net profit margin is expected to be 7.0% for FY2025E [5].

Core Insights - Snowflake Inc. demonstrated strong performance in Q3, exceeding expectations and showcasing broad-based growth and strength in its core business [3] - The company attributes its success to a combination of improved market conditions and specific strategic initiatives undertaken throughout the year [3] Company Performance - The CEO highlighted that the positive results were a culmination of investments and efforts made by the team, indicating a strong confidence in the company's direction and product adoption [3] - New product launches have been successful, with customers deriving value from these offerings, contributing to the overall positive performance [3] Market Environment - There is a suggestion that the overall market environment may have improved, which could be contributing to the interest in Snowflake's performance [2] - The combination of external market factors and internal company-specific drivers is seen as a key element in the recent success [2][3]

Snowflake Inc. (NYSE:SNOW) Conference Call Summary Company Overview - **Company**: Snowflake Inc. - **Event**: UBS Global Technology and AI Conference - **Date**: December 3, 2024 Key Points Industry Context - The cloud-based data industry is experiencing a significant migration from on-premises solutions to cloud platforms, with a projected increase in annual cloud spending from approximately $450 million to over $2 trillion in the next decade [12][13]. Performance Highlights - Snowflake reported a strong Q3 performance, exceeding expectations due to broad-based growth, strength in core business, and successful new product launches [4]. - New data engineering workloads have generated $200 million in annualized revenues, indicating a successful expansion beyond traditional data warehousing [9][10]. Migration and Customer Engagement - Migration from on-premises platforms to Snowflake is ongoing, with large migrations taking up to a year to complete. Customers are generally satisfied with the value they receive, leading to healthy renewal rates [6]. - The company aims to shift from a reactive cost optimization approach to a proactive strategy that ensures customers are not wasting money on inefficient practices [8]. Macro Trends - The adoption of open data formats, such as Iceberg, is reshaping the data landscape, allowing companies to store data in a more flexible manner without being locked into a single vendor [14][15]. - AI is seen as a transformative force, enhancing the ability to extract value from both structured and unstructured data, making data access and manipulation significantly easier [19][20]. Competitive Landscape - Snowflake is positioning itself as a full-service data platform, expanding its capabilities to include data ingestion, engineering, analytics, and machine learning [10][12]. - The partnership with Anthropic allows Snowflake to integrate advanced AI models directly within its platform, addressing customer concerns about data security and enhancing the utility of AI applications [21]. Future Outlook - The company is optimistic about the future, with AI and open formats expected to drive growth and innovation. Snowflake is focused on executing its strategy effectively to capitalize on these trends [17][19]. - There is a recognition of the competitive landscape, particularly with Databricks, but Snowflake believes its established customer base and long-term relationships provide a strong foundation for growth [27]. Additional Insights - The transition to open formats is not seen as a threat but rather an opportunity to access a larger pool of data, which can enhance Snowflake's offerings [15][18]. - The company emphasizes the importance of execution and customer engagement in navigating the evolving data landscape [17][19]. Conclusion Snowflake Inc. is navigating a dynamic industry landscape characterized by significant migration to cloud solutions, the adoption of open data formats, and the integration of AI technologies. The company's strong performance, proactive customer engagement strategies, and innovative partnerships position it well for future growth in the data platform market.

Snowflake (SNOW 0.63%) isn't having the best of years. The stock is down 11% in 2024, by far underperforming major indices. But it used to be much worse. Snowflake stock is actually up big in the last month after it reported blowout figures for its third quarter of fiscal year 2025 (ending Oct. 31). After that report, the stock surged over 30% the following trading day.Some may view that as missing the move, as it was an enormous rise in just one day. However, there are signs that this could be a long-term ...