Snowflake Inc. (SNOW) PT Lowered to $180 at Oppenheimer

Oppenheimer analyst Ittai Kidron lowered the price target on Snowflake Inc. (NYSE: SNOW) to $180.00 (from $220.00) while maintaining a Outperform rating.

The analyst commented: "We expect a slight beat from Snowflake for the July-quarter (2QFY25), with product revenue above guidance of $805-810 million (+26% YoY at the midpoint, vs. +34% in 1QFY25) and consensus projection of $813 million. Even in the current tough macro environment, we believe the improving consumption trends and abatement of cloud optimization headwinds are enough to deliver some upside to the quarter. We expect Snowflake to reiterate its annual product revenue guidance of $3,300 million (+24% YoY), remaining conservative. RPO of $5.0 billion last quarter (+46% YoY) benefitted from large customer traction (>$1M customers +30% YoY), and continues to remain lumpy. In terms of net-revenue-retention, NRR should track closer to product revenue growth and remain >125% (although, well below recent peak of 178% in the Jan. 2022 quarter). Of special interest is the company’s expanding AI-related product portfolio (Snowpark Container Services, Cortex, Artic, Document AI, etc.), which we believe can gain mindshare with data scientists/engineers, crucial to the company’s success as a broader unified data + AI platform. These, along with other products such as Unistore, Dynamic Tables, and Iceberg Tables, can drive upward momentum in Snowflake’s revenue growth for FY25 (CY24) and beyond. We also expect the stock to recover from current levels, as we believe consensus views on headwinds from tight budget spends and growing competition from Databricks are over-exaggerated. We maintain our Outperform, but lower our PT to $180 (from $220) on compression in market multiples."

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