Snowflake Earnings: Long-Term Upside Is Far From Melting; Shares Remain Undervalued

Snowflake’s third quarter was a mixed one, in our view, as revenue came in above our expectations while the bottom line came in under, as we had rosier expectations than the market. Encouragingly though, full-year fiscal 2024 guidance was raised on the revenue and profitability front. Shares have popped 7% upon results, inching the stock somewhat closer to our $231 fair value estimate, while still leaving room for ample upside as the stock remains in 4-star territory. Overall, we can’t stress enough to investors that Snowflake is extremely well-positioned to benefit from a world that is rapidly collecting more data, which requires a place to live, but also a playground like Snowflake’s to work with such data so as to extract more value. While these are passive tailwinds, we think Snowflake’s technical expertise and execution will make it more than just a passive beneficiary in the data management software space. We still believe the name is a top pick under our technology coverage.