Snowflake's Solid Q3 Driven By Strongest Consumption Activity In 2 Years: 9 Of 10 Analysts Raise Their Price Targets

Snowflake Inc SNOW shares were climbing in early trading on Thursday after the company reported upbeat third-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

Oppenheimer On Snowflake

Analyst Ittai Kidron maintained an Outperform rating while raising the price target to $240.

Snowflake reported solid results for the third quarter of fiscal 2024, exceeding consensus estimates for both revenues and earnings, Kidron said in a note. “The company benefited from high NRR, new customer adds, and large-customer traction,” he added.

Management raised their product revenue guidance for fiscal 2024 to $2.65 billion, “given improving consumption trends in the quarter,” the analyst stated. “We believe this sets up Snowflake to re-accelerate product revenue growth into FY25,” Kidron further wrote.

Needham On Snowflake

Analyst Mike Cikos reiterated a Buy rating while lifting the price target from $216 to $225.

Snowflake’s quarterly results were “healthily above elevated expectations (following stabilizing growth from hyperscalers and a strong earnings print from Datadog),” Cikos said.

“Key to the call was Snowflake's discussion of broad-based strength in Consumption, with trends continuing to build throughout 3QFY24 into October and November,” the analyst stated. “We view a stabilized/improving Consumption environment as driving Revenue upside in the short-term, while the company's growing arsenal of new product introductions should begin to bear fruit over the medium-/longer-term,” he added.

Truist Securities On Snowflake

Analyst Joel Fishbein reaffirmed a Buy rating while raising the price target from $200 to $210.

“Snowflake produced a strong beat and raise across the board, driven by stabilizing demand and resumed growth in their largest customers' consumption,” Fishbein wrote in a note

“We remain impressed by the resiliency of their data cloud platform and continue to believe they will be a leading beneficiary of next-gen workloads,” the analyst stated. “Looking forward into FY25 the company noted positive expectations from new products and tailwinds from GenAI, which we believe could drive upside to Street numbers,” he added.

Scotiabank On Snowflake

Analyst Patrick Colville maintained a Sector Outperform rating while lifting the price target from $194 to $226.

Snowflake delivered a product revenue beat in the third quarter and management raised its full-year guidance for the first time in a year, Colville said. “Snowflake’s deceleration looks to be approaching a plateau, while the “movement of analytics to the cloud remains important as per our extensive channel fieldwork” he added.

“It's too early though to call for ‘green-shoots’ of a recovery and Street F25e for 31% sales growth looks high,” the analyst further stated.

Mizuho Securities On Snowflake

Analyst Gregg Moskowitz reiterated a Buy rating while raising the price target from $180 to $210.

Snowflake reported “good” results for the quarter, with product revenue growth significantly exceeding Street expectations, Moskowitz said. “Mgmt encouragingly cited strong, broad-based consumption activity in F3Q, with improvement beginning in the month of September,” he added.

The company had a better-than-expected outlook for the fourth quarter, which included product revenue growth of 29%-30%, the analyst stated.

“While it would certainly be premature to declare SNOW out of the woods, mgmt's consumption commentary is encouraging, some new offerings are showing promise, and we're confident that SNOW's competitive positioning remains strong,” he further wrote.

Check out other analyst stock ratings.

Stifel On Snowflake

Analyst Brad Reback reaffirmed a Buy rating while raising the price target from $200 to $235.

“Consistent with the strong results from other consumption platforms this quarter (DDOG, Azure, AWS) as well as our positive private company checks, Snowflake posted its biggest upside quarter in over a year (+4%), driven by broad-based growth in consumption patterns, with additional upside from solid migration trends,” Reback wrote in a note.

“Notably, management indicated that 9 of the company's top 10 customers saw Q/Q growth in consumption, and that for 3 weeks in September, consumption growth was faster than any other period in the past two years,” he added.

Piper Sandler On Snowflake

Analyst Brent Bracelin maintained an Overweight rating while raising the price target from $195 to $220.

Snowflake’s Q3 product revenue exceeded guidance by $23 million, “on a 4% top-line beat (vs. 3% typical) with upside driven by the strongest consumption activity in two years,” Bracelin said.

“More importantly, consumption activity has remained healthy into Q4 prompting a $22M guide-up on 29% y/y growth (vs. our 26% estimate),” the analyst wrote. “After eight straight quarters of growth moderation, we are encouraged by early signs of a consumption recovery entering 2024,” he added.

Morgan Stanley On Snowflake

Analyst Keith Weiss reiterated an Overweight rating while lifting the price target from $215 to $230.

Improving consumption trends in the third quarter “put 30%+ growth in FY25 firmly back on the table,” Weiss wrote in a note.

“After nearly 2 years of optimization pressure, consumption trends are finally stabilizing, including a strong September when the company saw its best three-week period of usage growth in two years,” the analyst stated. “Consumption continued to grow in October and in November outside of the holiday period, which tends to have slower consumption,” he added.

DA Davidson On Snowflake

Analyst Gil Luria reaffirmed a Buy rating while raising the price target from $200 to $220.
“Snowflake continues to demonstrate that they are well positioned in both the near and long-term, and we maintain our belief that they are one of the best names in all of software at the moment, with an opportunity better than most to be a notable share gainer in a world where data is the hottest new commodity,” Luria said in a note.

“We believe that next year poses a significant opportunity for the company to further capitalize on, with management commenting around several soon-to-be generally available products that they believe provide new avenues of top-line growth in the next fiscal year,” he added.

Goldman Sachs On Snowflake

Analyst Kash Rangan maintained a Buy rating and price target of $220.

“We see the beat-and-raise Q validating the improved consumption and bookings trends exiting F2Q,” Rangan said.

“With a still sizable opportunity from on-prem migrations, expansion within G2K accounts and an emergent Gen-AI product cycle, we believe Snowflake remains uniquely positioned to sustain 30%+ revenue growth with high (and expanding) margins,” he added.

SNOW Price Action: Shares of Snowflake rose by 4.30% to $183.30 at the time of publication Wednesday.

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