Baird Boosts Snowflake Price Target to $180: A Closer Look
Friday, Nov 22, 2024 6:50 am ET
3min read Baird has raised its price target for Snowflake (SNOW) to $180 from $152, signaling a bullish outlook on the cloud server sector's up-and-coming candidate. The move follows Snowflake's double beat on earnings per share (EPS) and revenue in the second quarter of 2024, prompting the company to raise its guidance for the upcoming quarter and the full year of 2025. However, analysts remain divided on SNOW stock, with some expressing concerns about decreasing earnings from shares and diminishing operating margins.
Snowflake's Q2 earnings report on August 21, 2024, was a catalyst for Baird's decision to raise its price target. The company reported an EPS of $0.18 compared to the expected $0.16 and revenue of $869 million compared to the expected $852 million. Despite facing challenges such as a 18% decrease in earnings from shares and a 5.18% year-over-year reduction in operating margin, Snowflake's strong earnings and raised guidance outweighed these concerns for Baird analysts.
The recent CEO transition dynamics have also played a role in shaping market sentiment towards SNOW stock. In February 2024, the company's stock fell by 20% in a single trading session following the announcement of the CEO's departure. Although shares have struggled to recover since, Baird's updated price target suggests that the firm views the CEO transition as a temporary setback. Snowflake's strong earnings and raised guidance for Q3 and FY2025 indicate that the company's fundamentals remain robust, despite the leadership change.
Baird's price target revision reflects a shift in market sentiment towards Snowflake, aligning with other bullish analysts such as Evercore ISI, which reiterated an "outperform" rating with a $170 price target, and Goldman Sachs, which labeled SNOW shares a conviction buy with a $220 price target. However, other analysts remain cautious, citing increasing competitive pressure and a slowdown in the broader IT industry. Guggenheim and BTIG maintained "neutral" ratings, while Loop Capital and Baird lowered their price targets while keeping their "buy" ratings.
Despite the divided opinions among analysts, Baird's bullish outlook on Snowflake reflects the company's strong earnings and raised guidance. As the cloud server sector continues to grow, driven by the artificial intelligence (AI) rally, Snowflake's potential remains a topic of debate among investors. While some analysts caution about the challenges facing the company, others see opportunities for growth. As Snowflake navigates the competitive landscape and the impact of the CEO transition, investors will continue to monitor the company's performance and the evolving market sentiment.
Snowflake's Q2 earnings report on August 21, 2024, was a catalyst for Baird's decision to raise its price target. The company reported an EPS of $0.18 compared to the expected $0.16 and revenue of $869 million compared to the expected $852 million. Despite facing challenges such as a 18% decrease in earnings from shares and a 5.18% year-over-year reduction in operating margin, Snowflake's strong earnings and raised guidance outweighed these concerns for Baird analysts.
The recent CEO transition dynamics have also played a role in shaping market sentiment towards SNOW stock. In February 2024, the company's stock fell by 20% in a single trading session following the announcement of the CEO's departure. Although shares have struggled to recover since, Baird's updated price target suggests that the firm views the CEO transition as a temporary setback. Snowflake's strong earnings and raised guidance for Q3 and FY2025 indicate that the company's fundamentals remain robust, despite the leadership change.
Baird's price target revision reflects a shift in market sentiment towards Snowflake, aligning with other bullish analysts such as Evercore ISI, which reiterated an "outperform" rating with a $170 price target, and Goldman Sachs, which labeled SNOW shares a conviction buy with a $220 price target. However, other analysts remain cautious, citing increasing competitive pressure and a slowdown in the broader IT industry. Guggenheim and BTIG maintained "neutral" ratings, while Loop Capital and Baird lowered their price targets while keeping their "buy" ratings.
SNOW Basic EPS, Basic EPS YoY
Despite the divided opinions among analysts, Baird's bullish outlook on Snowflake reflects the company's strong earnings and raised guidance. As the cloud server sector continues to grow, driven by the artificial intelligence (AI) rally, Snowflake's potential remains a topic of debate among investors. While some analysts caution about the challenges facing the company, others see opportunities for growth. As Snowflake navigates the competitive landscape and the impact of the CEO transition, investors will continue to monitor the company's performance and the evolving market sentiment.
