Should You Buy, Sell, or Hold SNOW Stock Before Q3 Earnings Release?

Core Insights - Snowflake (SNOW) is expected to report third-quarter fiscal 2026 results on December 3, with earnings estimated at 31 cents per share, reflecting a year-over-year growth of 55% and revenues projected at $1.18 billion, indicating a 25.39% increase from the previous year [1][5]. Group 1: Financial Performance Expectations - The consensus estimate for product revenues in Q3 fiscal 2026 is between $1.125 billion and $1.13 billion, representing a year-over-year growth of 25% to 26% [5][9]. - The Zacks Consensus Estimate for customers with trailing 12-month product revenues greater than $1 million is currently at 686, suggesting a 26.5% increase year-over-year [6]. Group 2: Customer Growth and Retention - Snowflake's net revenue retention rate stands at 125%, with a 19% year-over-year growth in the number of customers, reaching 12,062 [3]. - The company added 533 net new customers in Q2, marking a 21% increase year-over-year [4]. Group 3: AI and Technological Advancements - Snowflake has launched approximately 250 new capabilities in the first half of fiscal 2026, enhancing data management and AI-driven insights [14]. - Nearly 50% of new customer logos in Q2 were influenced by AI, with 25% of deployed use cases involving AI [16]. Group 4: Strategic Partnerships - Snowflake's strong partner base includes major companies like SAP, Microsoft, AWS, and NVIDIA, which has significantly contributed to its growth [18]. - The collaboration with NVIDIA enhances Snowflake's machine learning capabilities, allowing for improved data science workflows [19]. Group 5: Stock Performance and Valuation - Snowflake shares have appreciated 62.7% year-to-date, outperforming the Zacks Computer & Technology sector and the Zacks Internet Software industry [7]. - The stock is currently trading at a forward 12-month Price/Sales ratio of 15.6X, indicating a stretched valuation compared to the industry average of 4.87X [11].