Snowflake Analysts Remain Bullish Post Q3 Results Amid Volatility

Needham analyst Mike Cikos reiterated a Buy on Snowflake Inc SNOW and reduced the price target from $240 to $165.
Snowflake demonstrated strong growth in Q3, with product revenue growing 67% Y/Y while revenue upside flowed through to operating profit and adjusted free cash flow.
However, the company provided Q4 guidance below Street expectations, notably calling out deteriorating trends in the APAC and SMB segments.
Furthermore, he believes preliminary FY24 product revenue comments suggesting 47% growth confuse investors as the outlook appears aggressive to him.
He appreciates the FY24 guidepost, but it does nothing to de-risk numbers.
Mizuho analyst Gregg Moskowitz reiterated a Buy with a $185 price target.
SNOW reported an excellent overall Q3. However, Q4 product revenue guidance was weaker than expected.
That said, SNOW has more recently seen some signs of improvement. More broadly, he maintained that SNOW's core offerings remain substantially differentiated.
While an increased focus on cost optimization by macro-sensitive customers is likely, he believes that fundamentals at SNOW generally remain healthy, and he sees a material longer-term upside to the stock price.
Raymond James analyst Simon Leopold maintained Outperform and reduced the price target from $197 to $180.
Despite the revised guidance driven by macro headwinds, the stock's pullback over the last several months implies that investors had anticipated slowing consumption.
In a normalized environment, he believes Snowflake's modest share, strong competitive position, and secular tailwinds from cloud adoption provide a compelling fundamental growth story for investors who can tolerate the volatility.
The price target reflects the reduced revenue outlook.
Price Action: SNOW shares traded higher by 6.32% at $151.98 on the last check Thursday.

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