Snowflake falls as macro headwinds drag on steerage, analysts stay upbeat By Investing.com

By Senad Karaahmetovic

Snowflake (NYSE:) shares are down about 5% in pre-open Thursday after the info software program firm supplied a softer-than-expected outlook.

Snowflake an EPS of $0.11 on income of $557 million, beating the typical analyst consensus of earnings of $0.04 on income of $539.07M. Income elevated 67% year-over-year (YoY) whereas the web income retention charge got here in at 165%, down from 173% YoY.

“We proceed to drive sturdy progress at scale, coupled with power in unit economics, working revenue, and free money stream,” stated Frank Slootman, Chairman and CEO of Snowflake.

For this quarter, the corporate stated it sees product income within the vary of $535-540M, lacking the $551.8M consensus and inflicting shares to drop. For FY2023, Snowflake sees product income at $1.92B, according to estimates. The corporate did elevate its full-year adjusted working margin outlook to three% from the prior 2%.

Morgan Stanley (NYSE:) analyst Keith Weiss lower the value goal to $225 per share from the earlier $248 to replicate below-consensus This autumn steerage.

“Robust buyer provides, quickly bettering FCF margins and de-risked FY24 outlook preserve us OW on a narrative that’s probably one of many first to re-accelerate popping out of the downturn,” Weiss stated in a notice.

Raymond James analyst Simon Leopold additionally lower the value goal – to $180 from $197 per share. Nonetheless, he stays upbeat on Snowflake inventory because of the causes outlined beneath.

“Regardless of the revised steerage pushed by macro headwinds, the inventory’s pullback during the last a number of months implies that buyers had anticipated slowing consumption. In a normalized setting, we imagine Snowflake’s modest share, sturdy aggressive place, and secular tailwinds from cloud adoption present a compelling elementary progress story for buyers who can tolerate the volatility,” Leopold wrote.