Cloud-based data warehousing company Snowflake Inc. SNOW reported fourth-quarter revenue Wednesday that more than doubled from a year ago and a loss that narrowed from the year-ago quarter. The full-year revenue guidance was about in-line with estimates.
The Snowflake Analysts: Rosenblatt Securities analyst Blair Abernethy reiterated a Neutral rating on Snowflake with a $285 price target.
Piper Sandler analyst Brent Bracelin maintained an Overweight rating and $312 price target.
Credit Suisse analyst Brad Zelnick maintained a Neutral rating and lowered the price target from $310 to $275.
Deutsche Bank Securities analyst Patrick Colville upgraded Snowflake shares from Hold to Buy and raised the price target from $270 to $300.
Rosenblatt On Snowflake's Business Resilience: Snowflake's revenues and remaining performance obligations exceeded Rosenblatt's expectations, Abernethy said in a note.
Other notable metrics include a 168% net retention rate and 88% year-over-year increase in large customers, the analyst said.
COVID-19 has had a neutral impact, he said.
Many enterprises are moving ahead with digital transformation plans several years earlier than they had planned before COVID-19, Abernethy said.
Due to scale, product mix, and improved discipline around sales contracting, gross margins are tracking ahead of Rosenblatt's expectations, the analyst said.
"Despite the Covid crisis' significant impact, we see Snowflake's business model as having continued resilience, and now expect it to deliver 90% RPO growth in FY22e (ending January 31, 2022) and 46% in FY23e."
Related Link: Let It SNOW: Wall Street Cheers Snowflake's 'Impressive' Results, Confidence In Long-Term Growth
Why Snowflake Is A Cloud Platform of Choice: Snowflake finished fiscal year 2021 on a high note with a $405 million quarter-over-quarter jump in RPO that rose by over 200% year-over-year to $1.33 billion, Piper Sandler analyst Bracelin said in a note.
Robust enterprise consumption drove triple-digit product revenue growth, and better-than-expected collections contributed to positive free cash flow of $7 million, the analyst said.
"The scale of new contracts and renewals during Q4 reinforces our bullish view on SNOW as a new enterprise data cloud platform of choice," he said.
Robust RPO momentum increases Bracelin's confidence in the growth trajectory beyond fiscal year 2022, given the multi-quarter lag between contract signings and consumption revenue triggers, he said.
Credit Suisse Applauds Snowflake: Snowflake continues to execute well, with data cloud becoming an increasingly strategic differentiator, enabling secure and governed data sharing, Zelnick said.
Consumption attributable to data from marketplace providers and a tenfold year-over-year increase in data marketplace listings signal a widening competitive moat, rising barriers to exit and broader platform adoption, the analyst said.
Better-than-expected net retentions also reflect customer satisfaction and strong uptake, he said.
The in-line product revenue guidance for fiscal-year 2022, the analyst said, reflects prudent conservatism rather than any underlying weakness.
"We believe Snowflake will play an increasingly important role across the entire data value chain, but remain Neutral due to its rich valuation at 45.6x EV/CY22 revenues," according to Credit Suisse.
Deutsche Bank On Snowflake: The fourth-quarter numbers support Deutsche Bank's thesis that Snowflake is in the sweet spot for two key secular trends of this decade: data-driven decision-making and cloud adoption, Colville said.
The analyst said valuation and lockup worries have subsided.
SNOW Price Action: Snowflake shares gained 0.8% in Thursday's session, closing at $249.
Related Link: Paysafe Taps Snowflake In Cloud Tech Partnership
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