Snowflake (SNOW) AI Stock Analysis

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Snowflake

(NYSE:SNOW)

Rating:78Outperform

Price Target:

$240.00

▲(15.28%Upside)

Snowflake's overall score reflects strong technical momentum and positive earnings call sentiment, indicating confidence in its strategic initiatives. However, high valuation metrics and profitability challenges present risks that need careful management.

Positive Factors

AI Progress

SNOW has made meaningful AI progress and sentiment has improved, though AI rev contribution remains early.

Innovation and Performance

SNOW announced Gen2 Warehouses, which doubles compute speed, improving price performance for customers, which could help drive additional workloads onto the Snowflake platform.

Product Adoption

Snowflake’s Cortex AI has seen unexpectedly strong adoption, with thousands of customers either actively using or nearing production for AI-powered workloads.

Negative Factors

Cash Flow

Databricks is nearly breakeven with its cash flow, while Snowflake's free cash flow margins are lower.

Competition

Databricks' revenue growth rate is significantly higher than Snowflake's projected growth rate.

Revenue Disclosure

Databricks has disclosed significant revenue from AI, and Snowflake has not yet provided an official AI revenue disclosure.

Snowflake (SNOW) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$69.46B

Dividend YieldN/A

Average Volume (3M)5.33M

Price to Earnings (P/E)―

Beta (1Y)1.47

Revenue Growth27.50%

EPS Growth-49.96%

CountryUS

Employees7,834

SectorTechnology

Sector Strength84

IndustrySoftware - Application

Share Statistics

EPS (TTM)0.24

Shares Outstanding333,658,000

10 Day Avg. Volume4,528,356

30 Day Avg. Volume5,329,212

Financial Highlights & Ratios

PEG Ratio-5.89

Price to Book (P/B)9.14

Price to Sales (P/S)0.00

P/FCF Ratio100.57

Enterprise Value/Market Cap0.71

Enterprise Value/Revenue3.49

Enterprise Value/Gross Profit19.23

Enterprise Value/Ebitda-9.94

Forecast

1Y Price Target

$226.50

Price Target Upside8.80% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering40

Snowflake Business Overview & Revenue Model

Company DescriptionSnowflake Inc. is a cloud-based data-warehousing company that provides a platform for data storage, processing, and analytics. It operates primarily in the technology sector, offering a comprehensive solution that enables organizations to consolidate their data into a single source of truth. Snowflake's platform is designed to scale seamlessly and support a wide range of workloads, from data engineering and data lakes to data science and machine learning, making it a versatile tool for businesses looking to harness the power of their data.

How the Company Makes MoneySnowflake makes money primarily through a consumption-based revenue model, where customers pay for the amount of data storage and computing resources they use on the platform. This model is flexible, allowing customers to scale their usage according to their needs, which can result in increased spending as data requirements grow. Additionally, Snowflake generates revenue through its partnerships with major cloud service providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform, leveraging these platforms' infrastructure to deliver its services. These collaborations not only enhance Snowflake's service offerings but also expand its market reach. Furthermore, Snowflake offers a range of premium features and services, such as data sharing capabilities and advanced security options, which provide additional revenue streams.

Snowflake Key Performance Indicators (KPIs)

Any

Total Customers

Total Customers
Shows the total number of customers, reflecting market penetration and the company's ability to attract and retain clients.

Chart InsightsSnowflake's customer base has been expanding consistently, with a notable acceleration in recent quarters. The latest earnings call highlights a 19% year-over-year increase in net new customers, aligning with strategic product innovations and expanded AI capabilities. This growth is underpinned by major contract signings and successful product launches, suggesting strong market demand and effective customer acquisition strategies. Despite heavy capital expenditures, the company's robust revenue growth and operational efficiency indicate a solid trajectory, enhancing its competitive position in the data cloud market.

Data provided by:

Main Street Data

Snowflake Earnings Call Summary

Earnings Call Date:May 21, 2025

(Q1-2026)

% Change Since: 16.22%|

Next Earnings Date:Aug 20, 2025

Earnings Call Sentiment Positive

The earnings call presented a positive outlook with strong revenue growth, major contract renewals, and successful product launches contributing to a robust performance. Despite some areas like net revenue retention not showing significant improvement, the overall operational efficiency and strategic partnerships in AI signal a healthy business trajectory.

Q1-2026 Updates

Positive Updates

Strong Revenue Growth

Product revenue for Q1 was $997 million, up 26% year-over-year. Excluding the impact of leap year, product revenue grew by 28% year-over-year.

High Remaining Performance Obligations

Remaining performance obligations totaled $6.7 billion, with a year-over-year growth of 34%.

Significant Customer Gains

Snowflake added 451 net new customers in Q1, growing 19% year-over-year.

Major Contract Signings

Two accounts signed $100 million-plus contracts in Q1, contributing to strong bookings.

Strong Net Revenue Retention

Net revenue retention was a healthy 124%.

Successful Product Launches and Adoption

Over 125 product capabilities were brought to market in the quarter, a 100% increase over last year. Products like Snowpark and Dynamic Tables outperformed expectations.

Expanded AI Capabilities

Snowflake has over 5,200 accounts using AI and machine learning weekly, and Cortex AI has become a foundational pillar of enterprise AI strategies.

Operational Efficiency

Non-GAAP operating margin was 9%, up 442 basis points year-over-year. Non-GAAP adjusted free cash flow margin was 20%.

Negative Updates

Neutral NER Growth

Net revenue retention, while healthy at 124%, did not show a significant improvement despite new product introductions and customer growth.

Impact of Leap Year

Q1 had one less day compared to the previous year, slightly affecting consumption reporting.

Heavy Capital Expenditure

Increased CapEx was noted due to new headquarters and office buildouts, although not expected to continue at this level.

Company Guidance

During the Snowflake Inc. Q1 Fiscal Year 2026 earnings call, the company provided a robust financial outlook, highlighting key metrics and expectations for the upcoming quarters. Snowflake reported Q1 product revenue of $997 million, marking a 26% year-over-year increase, and a net revenue retention rate of 124%. The remaining performance obligations reached $6.7 billion, growing 34% from the prior year. For Q2, Snowflake anticipates product revenue between $1.035 billion and $1.04 billion, representing 25% year-over-year growth, with a non-GAAP operating margin of 8%. The company is raising its FY 2026 revenue guidance to $4.325 billion, also projecting a 25% year-over-year increase. Additionally, Snowflake expects a non-GAAP product gross margin of approximately 75%, a non-GAAP operating margin of 8%, and a non-GAAP adjusted free cash flow margin of 25% for the fiscal year. This guidance reflects a strong confidence in their operational strategy and product innovations, particularly in AI, data engineering, and strategic partnerships.

Snowflake Financial Statement Overview

Summary

Snowflake shows strong revenue growth and robust cash flow management, essential for expansion in the competitive software industry. However, challenges in profitability and leverage management indicate the need for operational efficiency improvements.

Income Statement

Positive

Snowflake demonstrates impressive revenue growth with a 36% increase from 2024 to 2025 TTM, showcasing strong market demand and expansion capabilities. However, the company faces challenges with profitability, as evidenced by negative EBIT and net profit margins, indicating that operational expenses and cost structures need optimization to achieve profitability.

Balance Sheet

Positive

The balance sheet shows a solid equity base with an equity ratio of 29.5% in TTM, indicating a healthy capital structure. However, a high debt-to-equity ratio of 1.12 suggests potential leverage concerns, which could pose risks if revenue growth slows down. Continuous monitoring of debt levels is crucial to maintain financial stability.

Cash Flow

Positive

Snowflake has a strong cash flow position, with positive operating and free cash flows indicating effective cash generation. The company achieved a free cash flow growth rate of -17.7% from 2024 to 2025 TTM, showing volatility but overall robustness in cash management. The operating cash flow to net income ratio of -0.6 highlights the ability to generate cash despite negative net income.

TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
3.84B	3.63B	2.81B	2.07B	1.22B	592.05M
	Gross Profit
2.56B	2.42B	1.91B	1.35B	760.89M	349.46M
	EBIT
-1.55B	-1.46B	-1.09B	-842.27M	-715.04M	-543.94M
	EBITDA
-1.28B	-1.31B	-974.87M	-783.63M	-693.54M	-534.11M
	Net Income Common Stockholders
-1.40B	-1.29B	-836.10M	-797.53M	-679.95M	-539.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.91B	4.64B	3.85B	4.01B	3.85B	3.91B
	Total Assets
8.16B	9.03B	8.22B	7.72B	6.65B	5.92B
	Total Debt
2.69B	2.69B	287.98M	251.66M	206.30M	204.54M
	Net Debt
444.68M	56.47M	-1.47B	-688.24M	-879.43M	-615.64M
	Total Liabilities
5.74B	6.03B	3.03B	2.25B	1.60B	985.27M
	Stockholders Equity
2.41B	3.00B	5.18B	5.46B	5.05B	4.94B
Cash Flow		Free Cash Flow
751.93M	913.49M	750.16M	495.80M	56.85M	-94.12M
	Operating Cash Flow
832.67M	959.76M	848.12M	545.64M	110.18M	-45.42M
	Investing Cash Flow
285.84M	190.65M	832.26M	-597.88M	-20.80M	-4.04B
	Financing Cash Flow
-157.08M	-226.52M	-854.10M	-92.62M	178.20M	4.78B

Snowflake Technical Analysis

Technical Analysis Sentiment

Positive

Last Price208.18

Price Trends

50DMA

176.12

Positive

100DMA

172.85

Positive

200DMA

155.11

Positive

Market Momentum

MACD

9.19

Positive

RSI

67.97

Neutral

STOCH

45.73

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNOW, the sentiment is Positive. The current price of 208.18 is above the 20-day moving average (MA) of 203.61, above the 50-day MA of 176.12, and above the 200-day MA of 155.11, indicating a bullish trend. The MACD of 9.19 indicates Positive momentum. The RSI at 67.97 is Neutral, neither overbought nor oversold. The STOCH value of 45.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SNOW.

Snowflake Risk Analysis

Snowflake disclosed 54 risk factors in its most recent earnings report. Snowflake reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Snowflake Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADSK	79 Outperform	$62.51B	62.60	42.36%	―	12.89%	1.23%
SNOW	78 Outperform	$69.46B	―	-40.16%	―	27.50%	-49.96%
DDOG	73 Outperform	$41.60B	260.94	6.48%	―	25.54%	40.02%
WDAY	72 Outperform	$65.29B	135.03	5.70%	―	15.38%	-67.58%
TEAM	71 Outperform	$51.81B	―	-34.33%	―	19.12%	-161.42%
HUBS	64 Neutral	$29.25B	7,452.21	-1.34%	―	19.17%	83.20%
Sector *	62 Neutral	$11.97B	10.29	-7.47%	2.99%	7.32%	-8.06%

* Technology Sector Average

Performance Comparison

SNOW

Snowflake

209.12

78.45

60.04%

ADSK

Autodesk

299.30

58.79

24.44%

WDAY

Workday

245.65

33.19

15.62%

HUBS

HubSpot

549.57

-21.42

-3.75%

TEAM

Atlassian

200.32

43.70

27.90%

DDOG

Datadog

121.93

4.76

4.06%

Snowflake Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Snowflake Appoints Bill Scannell to Board of Directors

Positive

May 8, 2025

On May 7, 2025, Snowflake appointed Bill Scannell, a seasoned executive from Dell Technologies, to its Board of Directors. Scannell’s extensive experience in global sales and customer operations is expected to bolster Snowflake’s growth and strategic positioning in the AI and data cloud industry. His appointment reflects Snowflake’s commitment to leveraging experienced leadership to empower enterprises to fully utilize data and AI, reinforcing its leadership in the AI era.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.