6 Analysts Offer Takes on Snowflake's 'Truly Impressive' Q2 Earnings, Revenue Beat

Shares of Snowflake Inc. SNOW soared in after-hours trading on Wednesday, after the Bozeman, Montana-based company reported its quarterly revenues ahead of expectations.

Mizuho Securities

Analyst Gregg Moskowitz reiterated a Buy rating, while raising the price target from $200 to $225.

“While our checks on SNOW this quarter were better than the Street's, we certainly hadn't expected this degree of upside,” Moskowitz wrote. “SNOW reported a truly impressive F2Q, led by product revenue growth of 83% Y/Y that trounced the Street's +72% target and barely decelerated."

Guidance for the fiscal year 2023 was "modestly raised and looks beatable,” he added.

JMP Securities

Analyst Patrick Walraven maintained a Market Outperform rating, while raising the price target from $180 to $215.

Snowflake revenue beat put to rest “fears of deal delays or a consumption slowdown” Walraven said in a note. The analyst increased the non-GAAP earnings estimates for fiscal 2023, 2024 and 2025 from 13 cents per share to 15 cents per share, from 40 cents per share to 42 cents per share and from 84 cents per share to 86 cents per share, respectively.

Morgan Stanley

Analyst Keith Weiss reaffirmed an Overweight rating and a price target of $274.

“Product revs sustaining 83% YoY growth amidst a broader weakening of software demand bolsters our confidence in the strategic nature of SNOW's platform,” Weiss said. “Meanwhile the 2H guide looks appropriately conservative, which, coupled with a rapid pace of product innovation + expanding margins, keeps us OW,” he added.

Check Out Other Analyst Stock Ratings

Raymond James

Analyst Simon Leopold reiterated an Outperform rating, while raising the price target from $184 to $197.

“Snowflake’s modest share, strong competitve position, and the secular trend toward cloud adoption more than offsets cyclical headwinds for investors who can tolerate the volatility,” Leopold said.

“Further, while some customers might reduce consumption during a recession, others may find it advantageous to embrace its service as opposed to investing in new infrastructure and to gain business efficiency,” he added.

Rosenblatt Securities

Analyst Blair Abernethy reaffirmed a Buy rating, while raising the price target from $255 to $245.

Snowflake’s results were driven by “strength in the financial services vertical and a strong net revenue retention rate of 171%,” Abernethy wrote. “The revenue beat drove margins to ~4% [versus our (2)% expectation], with product gross margins of 75%.”

“We expect Snowflake to continue its rapid growth at scale, aided by its verticalization strategy, and drive improving margins over the next few years."

Piper Sandler

Analyst Brent Bracelin reiterated an Overweight rating, while reducing the price target from $164 to $220.

Snowflake strong revenue beat “coupled with an unexpected acceleration in cRPO growth to 81% y/y vs. 79% last quarter suggests that consumption demand drivers are offsetting query and cost optimization headwinds in the short-run,” Bracelin stated in a note.

“Large deal momentum in Europe, one of the most macro-challenged geographies, was a particularly encouraging sign that data operations and analysis remain a vital and expanding investment category in any environment."

SNOW Price Action: Shares of Snowflake had climbed by 19.22% to $190.53 at the time of publication Thursday.