Why This Snowflake Stock Analyst Is Bullish Ahead Of Q1 Print

Snowflake Inc (NYSE: SNOW) could meet or exceed expectations when it reports fiscal first-quarter results after the close Wednesday, according to Rosenblatt Securities.

The Snowflake Analyst: Blair Abernethy upgraded Snowflake from Neutral to Buy with an unchanged $285 price target. 

Related Link: Goldman Sachs Upgrades Snowflake: What Investors Need To Know

The Snowflake Thesis: The favorable information technology spending environment so far this year; accelerating digital transformation trends; and the robust performance by leading cloud service providers indicate upside to “our 93% year-over-year Product Revenue growth estimate,” Abernethy said in the Tuesday upgrade note.

“With the pull-back in the stock since last quarter’s report and the operational strength we expect this quarter, we are upgrading our rating to Buy ahead of the Q1 report,” he said. 

“For Q1, Snowflake’s third quarter report as a public company, we are expecting consumption-driven Product Revenue of $197m (guidance: $195m-$200m),” Abernethy said.  

“We expect Q1 non-GAAP Operating Margin of (23)% (versus Factset Consensus of (23)%, guidance: (23)%), and EPS of $(0.15) (consensus: $(0.16), no guidance). We are expecting total Q1 revenue of $209m, which is growth of 92% y-o-y (was 117% in Q4), non-GAAP operating income of $(47)m, and adjusted net income of $(45)m,” he further said.

SNOW Price Action: Shares of Snowflake were up 5.82% at $225 at last check Tuesday.