Snowflake Stock is Down But Its FCF Margin Guidance Could Lead to a 22% Higher Price Target

Core Viewpoint - Snowflake, Inc. reported strong adjusted free cash flow (FCF) and maintained its 25% FCF margin guidance for the full fiscal year, which could lead to a 22% higher price target for its stock at $276.49 per share [1]. Financial Performance - For fiscal Q3 ended October 31, Snowflake achieved a 29% year-over-year revenue growth and a 57% increase in adjusted free cash flow [4]. - The trailing 12-month adjusted FCF was $833.5 million, representing 19% of the $4,387 million trailing 12-month revenue, which is below the management's guidance of 25% [5]. Future Projections - Analysts forecast Q4 sales of $1.26 billion, and assuming a 42% adjusted FCF margin, the projected full-year adjusted FCF would be $939.66 million, resulting in a 20.2% adjusted FCF margin, which is still below the 25% guidance [7]. - The historical Q4 margins have been high, with last year's margin at 43% of sales, suggesting potential for meeting the 25% guidance if client renewals are strong [5].