Snowflake Earnings: Revenue Outlook Disappoints; New CEO Taking Over

No-moat-rated Snowflake reported decent fiscal fourth-quarter earnings. However, the company’s outlook for fiscal 2025 was disappointing. This, combined with the surprise retirement of the company’s CEO, Frank Slootman, created a challenging quarter for Snowflake, and investors are never thrilled with a surprise CEO succession. Slootman will be replaced by Sridhar Ramaswamy, who has only been with Snowflake since May 2023. As we factor in slower growth than we were previously expecting, driven by the disappointing outlook, we are lowering our fair value estimate to $187 from $231. We thought shares were fairly valued heading into today’s earnings, and based on the drop in share price of roughly 20% afterhours, our updated fair value estimate implies shares are fairly valued once again