Why Snowflake Inc. (SNOW) Outpaced the Stock Market Today

Snowflake Inc. (SNOW) closed at $153.12 in the latest trading session, marking a +1.52% move from the prior day. The stock outperformed the S&P 500, which registered a daily gain of 0.72%. Meanwhile, the Dow experienced a rise of 0.48%, and the technology-dominated Nasdaq saw an increase of 1.16%.

Heading into today, shares of the company had lost 9.03% over the past month, lagging the Computer and Technology sector's loss of 5.35% and the S&P 500's loss of 4.99%.

The investment community will be paying close attention to the earnings performance of Snowflake Inc. in its upcoming release. The company is predicted to post an EPS of $0.33, indicating a 37.5% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $1.32 billion, indicating a 26.63% growth compared to the corresponding quarter of the prior year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.8 per share and a revenue of $5.89 billion, indicating changes of +44% and +25.73%, respectively, from the former year.

Any recent changes to analyst estimates for Snowflake Inc. should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Snowflake Inc. is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Snowflake Inc. is presently being traded at a Forward P/E ratio of 83.82. This expresses a premium compared to the average Forward P/E of 19.24 of its industry.

We can also see that SNOW currently has a PEG ratio of 3.83. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software industry currently had an average PEG ratio of 1.06 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 152, which puts it in the bottom 38% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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