On Tuesday, Rosenblatt Securities reaffirmed its positive stance on shares of Snowflake Inc . (NYSE: NYSE:SNOW), maintaining a Buy rating and a $180.00 price target for the cloud-based data warehousing company. The firm's expectations are set ahead of Snowflake's third-quarter fiscal year 2025 earnings report, which is scheduled to be released after the market closes on November 20th, 2024.
The firm's analyst noted that Snowflake has seen stable growth from Cloud Service Providers in the last two quarters and expects this trend to continue.
With normalized cloud optimization levels and ongoing efforts in cloud migration, the analyst anticipates that Snowflake will either meet or slightly surpass the projected organic growth rate of approximately 26% year-over-year for Q3 Product Revenue. This estimate compares to the 32% growth rate observed in the second quarter and the full fiscal year 2025 forecast of 24%.
The analyst also highlighted that they are closely monitoring the potential impact of tiered storage changes on Snowflake's business. Customer discussions have revealed that the adoption of Iceberg tables, while presenting a headwind, is expected to unfold gradually over time.
In summary, Rosenblatt Securities' preview of Snowflake's third-quarter fiscal year 2025 earnings maintains the firm's previous estimates and target price of $180. The analyst's commentary underscores a steady outlook for the company's performance, with particular attention to the evolving dynamics of cloud storage and service adoption.
In other recent news, Snowflake Inc. has reported a 30% year-over-year increase in product revenue, reaching $829 million for the second quarter of fiscal year 2025, and has raised its full-year product revenue outlook. Furthermore, the company completed a significant $2.3 billion convertible debt offering.
On the analyst front, Citi maintained a Buy rating on Snowflake shares but adjusted the price target to $183. Piper Sandler continued its Overweight rating with a consistent price target of $165, while KeyBanc Capital Markets reduced its price target to $150 but retained an Overweight rating.
Monness Crespi Hardt upgraded Snowflake from Neutral to Buy, setting a new price target of $140. In contrast, Evercore ISI and Goldman Sachs (NYSE:GS) maintained positive stances on Snowflake, with price targets of $170 and $220 respectively. These ratings and adjustments follow an analysis of the company's upcoming financial results and market conditions.
In terms of product innovation, Snowflake has announced several enhancements to its data platform and new AI features. These advancements aim to simplify the creation of conversational apps, improve data readiness, and enable enterprises to process large inference jobs with guaranteed throughput. These are recent developments for Snowflake, indicating a commitment to improved execution and quicker product innovation.
InvestingPro Insights
As Snowflake prepares to release its Q3 fiscal year 2025 earnings, InvestingPro data provides additional context to Rosenblatt Securities' analysis. Snowflake's revenue growth remains strong, with a 31.21% increase over the last twelve months, aligning with the analyst's expectations of continued stable growth. However, the company's profitability remains a concern, as highlighted by an InvestingPro Tip indicating that Snowflake is not profitable over the last twelve months.
Despite this, another InvestingPro Tip suggests that analysts predict the company will be profitable this year, which could be a positive sign for investors. The company's financial health appears solid, with InvestingPro data showing that Snowflake holds more cash than debt on its balance sheet.
For investors seeking a more comprehensive analysis, InvestingPro offers 4 additional tips for Snowflake, providing deeper insights into the company's financial position and market valuation.
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