A Look Ahead: Snowflake's Earnings Forecast

Snowflake SNOW is preparing to release its quarterly earnings on Wednesday, 2024-11-20. Here's a brief overview of what investors should keep in mind before the announcement.

Analysts expect Snowflake to report an earnings per share (EPS) of $0.15.

The announcement from Snowflake is eagerly anticipated, with investors seeking news of surpassing estimates and favorable guidance for the next quarter.

It's worth noting for new investors that guidance can be a key determinant of stock price movements.

Earnings History Snapshot

In the previous earnings release, the company beat EPS by $0.02, leading to a 14.7% drop in the share price the following trading session.

Here's a look at Snowflake's past performance and the resulting price change:

Stock Performance

Shares of Snowflake were trading at $127.43 as of November 18. Over the last 52-week period, shares are down 24.56%. Given that these returns are generally negative, long-term shareholders are likely unhappy going into this earnings release.

Analyst Insights on Snowflake

For investors, grasping market sentiments and expectations in the industry is vital. This analysis explores the latest insights regarding Snowflake.

The consensus rating for Snowflake is Buy, derived from 21 analyst ratings. An average one-year price target of $160.14 implies a potential 25.67% upside.

Comparing Ratings with Peers

The following analysis focuses on the analyst ratings and average 1-year price targets of Cloudflare, GoDaddy and MongoDB, three prominent industry players, providing insights into their relative performance expectations and market positioning.

• For Cloudflare, analysts project an Neutral trajectory, with an average 1-year price target of $92.33, indicating a potential 27.54% downside.
• The consensus outlook from analysts is an Neutral trajectory for GoDaddy, with an average 1-year price target of $186.15, indicating a potential 46.08% upside.
• MongoDB received a Outperform consensus from analysts, with an average 1-year price target of $336.39, implying a potential 163.98% upside.

Peer Metrics Summary

Within the peer analysis summary, vital metrics for Cloudflare, GoDaddy and MongoDB are presented, shedding light on their respective standings within the industry and offering valuable insights into their market positions and comparative performance.

Key Takeaway:

Snowflake ranks first in revenue growth among its peers. It has the highest gross profit margin. However, it has the lowest return on equity.

Delving into Snowflake's Background

Founded in 2012, Snowflake is a data lake, warehousing, and sharing company that came public in 2020. To date, the company has over 3,000 customers, including nearly 30% of the Fortune 500 as its customers. Snowflake's data lake stores unstructured and semistructured data that can then be used in analytics to create insights stored in its data warehouse. Snowflake's data sharing capability allows enterprises to easily buy and ingest data almost instantaneously compared with a traditionally months-long process. Overall, the company is known for the fact that all of its data solutions that can be hosted on various public clouds.

Snowflake: Financial Performance Dissected

Market Capitalization: Surpassing industry standards, the company's market capitalization asserts its dominance in terms of size, suggesting a robust market position.

Revenue Growth: Over the 3 months period, Snowflake showcased positive performance, achieving a revenue growth rate of 28.9% as of 31 July, 2024. This reflects a substantial increase in the company's top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Information Technology sector.

Net Margin: Snowflake's net margin lags behind industry averages, suggesting challenges in maintaining strong profitability. With a net margin of -36.47%, the company may face hurdles in effective cost management.

Return on Equity (ROE): Snowflake's ROE is below industry standards, pointing towards difficulties in efficiently utilizing equity capital. With an ROE of -7.3%, the company may encounter challenges in delivering satisfactory returns for shareholders.

Return on Assets (ROA): Snowflake's ROA falls below industry averages, indicating challenges in efficiently utilizing assets. With an ROA of -4.45%, the company may face hurdles in generating optimal returns from its assets.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.08.

To track all earnings releases for Snowflake visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.