3. Snowflake Inc. (NYSE:SNOW) has gained 0.05% as of 10:01 AM ET after Simon Leopold at Raymond James initiated coverage on the Bozeman, Montana-based data warehousing company. The analyst gave Snowflake Inc. (NYSE:SNOW) stock an Outperform rating with a price target of $184. In a research note issued to investors earlier today, the analyst highlighted that the company’s cloud-based data warehousing business could compete against cloud-agnostic and public cloud operators because of its uniqueness and differentiation. Leopold expects Snowflake Inc. (NYSE:SNOW) to gain share in the massive market and ever-increasing total addressable market (TAM). The analyst expects the top line to grow by 50% annually for the next three years.
In its Q1 2022 investor letter, Snowflake Inc. (NYSE:SNOW) was mentioned by Baron Funds. Here’s what the asset management firm said:
“Snowflake grew revenues…106% (to $1.2 billion — while new bookings in the fourth quarter alone were $1.2 billion in contract value) with 12% margins. The stock was down 32% in the first quarter. We believe that these companies, along with many others that we own, are the long-term beneficiaries of digital transformation, a multi-decade paradigm shift sweeping global economies today. Frank Slootman, Snowflake’s CEO, explained it this way in his most recent earnings call with investors:
“Snowflake’s growth is driven by digital transformation and long-term secular trends in data science and analytics, enabled by cloud-scale computing and Snowflake’s cloud-native architecture. Snowflake is a single data operations platform that addresses a broad spectrum of workload types and incredible performance economy and governance. As a platform, Snowflake enables the data cloud, a world without silos and the promise of unfettered data science.”
In plain English it means that we want to make better decisions and we have all this data available to us. Snowflake will enable businesses to utilize all their data to improve their decision-making.
Snowflake Inc. provides a data platform for large-scale data analytics. Shares fell 32% during the first quarter despite reporting strong results, finishing 2021 with 106% year-over-year revenue growth, while booking $1.2 billion of new business in the fourth quarter alone. Shares declined due to the rotation out of fast-growing long-duration stocks as well as concerns over the company’s newly introduced infrastructure improvements, which make customers more efficient in using the Snowflake platform (lowering cost on a per usage basis). While some investors viewed that negatively due to the near-term impact on usage-based revenues, we see this as a positive development, since putting customers first tends to create a lot of value over the long term. We believe that by reducing costs to customers, they will migrate more workloads to Snowflake, making the company better positioned to capture a bigger portion of its large market opportunity and extending its technology leadership over competitors. We remain excited about Snowflake’s best-in-class growth at scale with favorable unit economics, addressing one of the largest opportunities in technology.”
Overall, 81 hedge funds held a stake in Snowflake Inc. (NYSE:SNOW) as of Q1 2022.
