Snowflake stock surges toward best day since May after ‘phenomenal’ earnings

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Shares of Snowflake Inc. were headed for their best performance in more than six months when the software company’s latest earnings report drew a flurry of praise.

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Snowflake shared snow,
+6.60%
were up 10.5% in Wednesday’s trading, and were on track for their biggest single-day percentage gain since May 14, when the stock rose 11.6%.

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The company saw its revenue more than double in the most recent quarter and what analysts see as an optimistic sign about its future pipeline.

,[L]”Application deal activity is building, and international markets are gaining momentum,” wrote Mizuho analyst Greg Moskovitz. “More broadly, we remain of the view that SNOW’s offering is well ahead of the competition at this point in time.”

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Moskowitz took note of comments from Snowflake’s management team that the company had a “breakout quarter” for bookings and consumption, even though some of its outperformance came from stronger-than-expected consumption by Snowflake’s biggest customers. Overall, he called Snowflake’s results “unprecedented.”

“We believe we are in the early stages of a powerful trend in which companies will largely standardize on Snow’s platform,” concluded Moskowitz, reiterating a buy rating and $450 price target.

Evercore ISI’s Kirk Materne was upbeat about the acceleration in Snowflake’s product revenue growth, which he called a “monster quarter” for the company.

“While the larger-than-expected beat was driven by strong consumption from some of SNOW’s larger customers, the upbeat guide to F4Q product revenue (+94-96%) helps illustrate why trends in the business are sustainable and why Snowflake became a There has been one of the truly unique hyper-growth stories in software,” he wrote.

Snowflake “is not going to be immune to more market change” if the macroeconomic landscape remains “volatile,” Matteron continued, but he likes the company’s long-term prospects. He rated the stock to outperform, and raised his price target from $380 to $400.

Among the high points for Oppenheimer’s Itai Kidron was that Snowflake posted its first quarter on a record of positive adjusted earnings, while the net revenue retention rate was above 170%.

“We see a long trajectory of rapid revenue growth for the next few years, which is a [information technology] Shift to cloud-centric model, digital transformation, and more spending [machine learning]/data science,” he wrote in a note to clients, reiterating his outperform rating and raising his target price from $360 to $400.

Snowflake shares are up 23% so far this year as the S&P 500 SPX,
+0.50%
increased by 21%.

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