Snowflake Ltd. (SNOW) operates as a data cloud company, crafting insightful solutions, consolidating data, constructing data applications, and facilitating data exchange. Formerly recognized as Snowflake Computing Inc., the corporation adopted the moniker Snowflake Inc. in 2019, paving the way for its momentous initial public offering in 2020. Nestled in Montana, the company boasts a market cap valuing at $52 billion, catering to over 3,000 clients across the Asia-Pacific, EMEA, and Americas regions.
Unfortunately, Snowflake’s shares have taken a hit this year, plummeting by 21% year-to-date and shying away nearly 34% from its 52-week peak of $237.72 recorded in February.
Disclosing its 4Q outcomes in late February, Snowflake showcased revenue amounting to $774.7 million, surpassing analysts’ anticipated $759.6 million, marking a 32% growth rate year-over-year. The non-GAAP EPS stood at $0.35, beating the estimated $0.18, and gross margin inflated from 65.1% to 68.8%. Looking at the full-year perspective, Snowflake’s revenue tallied at $2.67 billion, reflecting a 38% YoY surge, with EPS climbing to $0.98 from the preceding year’s $0.25.
Regrettably, the company’s revenue projection for 1Q 2025 ranging between $745 million to $750 million signals a slower growth pace of 26% to 27%, trailing behind the robust 33% growth witnessed in Q4 and the 38% surge throughout 2024.
Snowflake also shook the market by announcing the retirement of CEO Frank Slootman, who gracefully passed the baton to their senior vice-president of AI, Sridhar Ramaswamy. Subsequently, the stock tumbled 18% on result day and continued its plunge, logging over a 30% drop ever since.
Snowflake Unveils New OpenAI Model
Snowflake recently unveiled its latest OpenAI model named “Snowflake Arctic.” This enterprise-grade large language model (LLM) demonstrates proficiency in handling intricate workloads and excelling in various industry SQL coding benchmarks. Snowflake intends to provide the model under the Apache 2.0 license for both personal and commercial utilization.
“This marks a pivotal moment for Snowflake, with our AI research unit spearheading innovation at the vanguard of AI,” stated Snowflake’s freshly appointed CEO, Sridhar Ramaswamy.
The model is slated for availability on multiple platforms, including Amazon Web Services, NVIDIA API catalog, Microsoft Azure, Lamini, Perplexity, Hugging Face, among others. For now, Arctic is accessible for deployment within Snowflake Cortex.
CEO’s Insider Purchase
In a notable move, Snowflake’s CEO, Sridhar, acquired approximately 31,542 shares of SNOW on March 25 at an average price of $158.52 per share, amassing a stake exceeding $5 million and marking his total ownership at 0.0777% of the company.
Additionally, early in March, Mark McLaughlin, a board member, procured over 3,000 shares valued at $501,314. Notably, he had previously invested $300,000 in stocks shortly after joining the board in May 2023.
Analysts Say SNOW Stock Is a Buy
Analysts have bestowed Snowflake with a “Moderate Buy” consensus rating, projecting a mean price target of $205.76, illustrating a promising 31.6% upside potential from the current valuation. Presently, 41 financial experts track the stock, with 25 advocating a “Strong Buy,” 3 recommending a “Moderate Buy,” 11 holding a “Hold” stance, and 2 assigning a “Strong Sell” label to Snowflake.
