Is A Good Time To Buy Stock in Snowflake Inc?

Is A Good Time To Buy Stock in Snowflake Inc?

Analysts who are offering a 12-month price forecast for Snowflake, Inc (NYSE: SNOW) have set a median target of $194.12. Despite being the median, the high estimate is $530.00 while the low estimate is only $110.00. Most importantly, though, this new target estimate represents more than a 48 percent increase from the previous price target, which hovered at or above $121.

The current price for Snowflake, Inc stock is $131.26 per share.

With this data, the current consensus among analysts advises that Snowflake, Inc has a Buy rating. Indeed, while most analysts would recommend buying stock in Snowflake, some are a little more cautious: they advise it is an appropriate time to hold on your status. As a matter of fact, some analysts might even argue that Snowflake Inc stock is currently overvalued. This mean that it does bear a small risk of underperforming.

When all is said and done, though, while share price is down at the moment, most analysts forecast the value will begin to climb the market again. More importantly, we might even start seeing these positive shifts starting as early as the next few months.

What is Snowflake, Inc?

Snowflake, Inc is a cloud computing data storage company based out of Bozeman, MT. Founded in July 2012, the company grow quietly—but steadily—until going public in October of 2014. This cloud computing firm offers data storage and analytics services, a cache of products typically described as “data-warehouse-as-a-service”. This warehouse of products and services allows corporate client users to store and analyze data, utilizing both cloud-based hardware and software.

The founders of Snowflake, Inc built the company—and the platform—from scratch. The company's vision was to primarily harness the unlimited potential of data cloud storage. Expanding on this strong initial vision, Snowflake, Inc has grown to assure customers can consistently anticipate a 612 percent return on investment (ROI), as well as total benefits valued at more than $21 million over three years of service.

In all, Snowflake, Inc clients have stored more than 250PB of data that are managed by Snowflake's flagship Data Cloud product, which operates at least 515 million data workloads every day. These customers are serviced by 1300+ technology partners and system integrators.

A Year of Impressive Growth

Snowflake, Inc has seen an excellent pattern of growth across the last year. For one, reported quarterly earnings since Q2 of 2021 have mostly surprised analysts with significantly higher numbers than they expected. While quarterly growth wavered up and down, annual growth—on full-year guidance from 2020 to 2021—registered at an impressive 771 percent.

A better metric for the success of Snowflake, Inc would be in the realm of reported sales. Sales between second quarter 2021 through the first quarter 2022 either met or modestly beat analyst expectations, resulting in quarterly sales growth of nearly 10.7 percent. Similarly, reported annual sales performed well, resulting in full year growth of 66.88 percent from 2020 to 2021.

Buy Now While the Price is Low

The moderate hold rating on Snowflake, Inc comes even as share price is down a somewhat alarming 59 percent on the year, so far. Indeed, when price is low, that is the time to buy, but with estimated growth of nearly 390 percent estimated for 2022, there really has never been a better time to invest in Snowflake.

To further support this, one only need to track Snowflake's momentum this year. Barely into second fiscal quarter 2022, revenue was up 85 percent year over year, at a sum of $422.4 million. In addition to this, net revenue held strong at a firm 174 percent.

But if that is not enough to reinforce the moderate buy rating, Snowflake's business volume is looking good, too. Currently, the cloud-data-warehousing company continues to bring in substantially large clients. Their roster presently sits at 206 customers, with trailing 12-month product revenue valued at more than $1 million. Just one year ago, Snowflake, Inc only had 104 of these clients.

Another metric that supports a buy rating is upside potential. In this case, analysts have given Snowflake, Inc an upside potential as high as 61.58 percent, based on the average listed price target.

Summary: Moderate Buy

With such incredible growth opportunity, then, it is easy to see why analysts are giving Snowflake, Inc a moderate Buy rating. Again, some may choose to hold off and buy as the price continues to slip, slightly, before it rebounds. But if not now, buy soon.

Companies in This Article:

CompanyCurrent PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Snowflake (SNOW)$151.80+5.0%N/A-68.50Buy$216.93

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