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Stock Analysis & Ideas

Snowflake Revenues Climbed in Q4; Website Visits Hinted at It

Snowflake Inc. (SNOW), a cloud-based data platform, has been a popular stock since its initial public offering in 2020, due in part by its rapid growth. Despite the fact that the company’s latest fourth-quarter results did not excite investors, Snowflake produced some impressive metrics on the surface, including robust top-line growth.

Surprisingly, the new TipRanks monthly website visitor metric already indicated that Snowflake could report strong revenues in the fourth quarter.

During the Q4 quarter, Snowflake’s revenues totaled $383.8 million, up 101% year-over-year. It easily outperformed the $372.7 million average predictions. In particular, product revenues rose 102%, acting as a tailwind.

The ability to display a website’s total estimated visitors even before an earnings announcement is one of the new tool’s most beneficial features. The statistics for snowflake.com showed a definite rising trend.

More specifically, the graph below indicates that total anticipated website visitors to snowflake.com increased 9.5% sequentially to 8.8 million in the fourth quarter.

Other Note-Worthy Points

Despite strong revenue numbers, the company posted a loss of $0.43 per share. However, it was a significant improvement over the previous year’s loss of $0.70 per share. Snowflake should continue to benefit from its rapidly growing top-line growth.

Snowflake is seeing significant adoption of its platform from existing clients. The firm had 5,944 overall clients at the end of the fourth quarter, with 184 of them generating over $1 million in yearly sales. Finally, Snowflake’s adjusted free cash flow climbed to $102 million in Q4, indicating that the company’s financials have improved dramatically.

However, management forecasted just a 66% increase in sales for the fiscal year 2023 versus 103.5% in the fiscal year 2022.

Though the guidance signals a deceleration in growth, Snowflake seems to be a fundamentally strong company that could be an excellent long-term growth stock to own.

Wall Street’s Take

The Wall Street analysts are cautiously optimistic on Snowflake, with a Moderate Buy consensus rating based on 14 Buys and 6 Holds. The average Snowflake stock prediction of $331.21 implies upside potential of approximately 58% to current levels for this stock.

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