The listing of Snowflake (NYSE: SNOW), a cloud data platform, on the New York Stock Exchange on September 16, 2020, has left its mark as the biggest software IPO ever.
Founded in 2012, Snowflake’s platform supports a wide range of workloads that enable its customers’ most important business objectives, including data warehousing, data lakes, data engineering, data science, data application development, and data sharing.
The Delaware-based corporation sold 32.2 million shares of its Class A common stock at an offering price of $120 per share. Through its initial public offering (IPO), Snowflake raised $3.7 billion in net proceeds.
After the closing of its IPO, both Salesforce Ventures LLC and Berkshire Hathaway Inc. individually bought about 2,083,333 shares of Snowflake’s Class A common stock at $120 per share in two simultaneous private placements. Through the transaction, the company received cumulative proceeds of $500 million.
Shares of the company opened at $230.76 on September 17, 2020, up 92.3% from the IPO price, and closed the day at $227.54, up 89.6%.
Unfortunately, since its listing, SNOW stock has declined 35.7% (as of July 14, 2022).
The company’s stock touched its all-time high of $401.89 in November 2021. Presently, Snowflake commands a market capitalization of $46.51 billion.
Snowflake Looks Unstoppable
Snowflake’s results for the first quarter of fiscal 2023 were very impressive. Product revenues for the quarter came in at $394.4 million, up 84% from the year-ago period.
The company’s remaining performance obligations metric came in at $2.6 billion, surging 82% year-over-year. Encouragingly, its net revenue retention rate was 174% as of April 30, 2022.
Snowflake has been consistently expanding its offerings through product innovation and enhanced capabilities. It announced the launch of Unistore workload at its recently held Snowflake Summit conference. According to the company, Unistore extends Snowflake Data Cloud capabilities to streamline and simplify the development of transactional applications.
The company’s other new offering, Native Application Framework, enables developers to rapidly and easily build, monetize, and deploy data-intensive applications in the Data Cloud.
In June, Snowflake introduced Snowpark for Python, which makes Python’s ecosystem of open-source packages and libraries available for data scientists, data engineers, and application developers.
In another positive development, Snowflake announced that it will work with IT solutions provider Carahsoft and its resellers to support public sector agencies to rapidly obtain and implement Snowflake’s technology in the AWS Marketplace to conveniently transform, integrate, and analyze their data.
SNOW Commands a Strong Buy Rating
Overall, the Street is very optimistic about the stock and has a Strong Buy consensus rating based on 23 Buys, five Holds, and one Sell. Snowflake’s average price forecast of $190.16 signals that the stock may surge nearly 30.2% from current levels.
TipRanks data shows that financial bloggers are 82% Bullish on Snowflake, compared to the sector average of 65%. The news sentiment is also positive for the stock.
Snowflake: Not Melting Anytime Soon
The growing digitization trend and increasing technological dominance provide strength to Snowflake’s future prospects. The high levels of IT spending across the globe paint a rosy picture too. According to Gartner, global IT spending is expected to surge 4% year-over-year to a whopping $4.4 trillion in 2022. Thus, SNOW stock could be considered by investors who are seeking to buy the dip in the company’s shares.
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