On Wednesday, BofA Securities revised its price target on shares of Snowflake Inc . (NYSE: NYSE:SNOW), reducing it to $200 from the previous $212, while maintaining a Neutral rating on the stock. The adjustment comes ahead of the company's expected first-quarter earnings report on May 22.
The firm based its target change on data from the April BofA Cloud View report, which includes Similarweb (NYSE:SMWB) data on total page views—a metric that has shown a 79% correlation to Snowflake's product revenue. According to the analyst, there was an observable trend in the data that could be indicative of the company's performance.
In February, Snowflake's total page views rose by 6.2% month-over-month, outperforming the typical monthly seasonality of a 1.4% increase. However, the growth in March, although positive at 11.1% month-over-month, was slightly below the expected 13%. A more significant deviation was noted in April, with a decrease of 19.1% month-over-month, compared to the seasonal average decline of 10.7%.
This pattern of fluctuating page views is used by the firm to anticipate the forthcoming quarterly product revenue results. The data suggests there may be variability in Snowflake's performance, which is reflected in the adjusted price target.
Investors and market watchers are now looking toward the May 22 earnings report to see how Snowflake's actual financial performance aligns with the insights drawn from the Similarweb data. The company's stock performance in the near term may be influenced by these anticipated results.
InvestingPro Insights
As Snowflake Inc. (NYSE: SNOW) gears up for its first-quarter earnings report on May 22, investors are considering various metrics to gauge the company's health and potential. According to InvestingPro data, Snowflake holds a market capitalization of $54.02 billion, despite a negative P/E ratio of -63.54, reflecting its current lack of profitability. However, analysts are optimistic, predicting that the company will become profitable within the year. This aligns with the InvestingPro Tip that Snowflake's liquid assets exceed short-term obligations, suggesting a solid financial position to weather short-term market fluctuations.
Another InvestingPro Tip worth noting is that Snowflake's price has fallen significantly over the last three months, with a 30.74% drop in the three-month price total return. This could indicate a potential opportunity for investors looking for an entry point into a company that is trading at a high revenue valuation multiple and a high Price/Book multiple of 10.42 as of the last twelve months ending in Q4 2024. The company's revenue growth remains robust at 35.86% over the same period, emphasizing its rapid expansion despite market volatility.
For those interested in deeper analysis and additional insights, InvestingPro offers more tips on Snowflake, which can be found at https://www.investing.com/pro/SNOW. Readers can also take advantage of an exclusive offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a total of 7 InvestingPro Tips for Snowflake Inc., including the company's cash position and dividend policies.
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