On Wednesday, August 24, following the closing of the market, Snowflake (NYSE:SNOW) will release its second-quarter earnings. The average revenue estimate is $467.31M (+71.7% Y/Y), while the consensus EPS estimate is -$0.01. SNOW has consistently outperformed sales and EPS expectations over the past two years, beating them both 71% of the time.
EPS projections have seen 1 upward modification and 24 downward revisions in the last three months. Ten revisions have been for the better and eleven have been for the worse.
Analyst Opinions:
Recent field testing indicated weak utilization, prompting UBS to drop SNOW to Neutral, while Citi expressed worries about usage challenges and too optimistic expectations. Morgan Stanley adjusted its revenue estimates downwards on infrastructure software firms such as SNOW. This is largely due to slowing usage trends, lengthier sales cycles for businesses selling to large enterprises, and the deteriorating state of Europe,
SNOW is well positioned for long-term trends, according to Monness, Crespi, and Hardt, but Q2’s top-line growth is probably going to slow down. Due to a decline in field checks and a slowdown in cloud hyperscalers in Q2, BTIG lowered SNOW to Neutral. On the basis of recent multiple compression and progress with platform expansion, Jefferies upgraded SNOW to Buy.
As it anticipates that SNOW will generate “substantial” free cash flow and that it may do so sooner than anticipated, J.P. Morgan raised the stock to Overweight.
SNOW was upgraded by Canaccord Genuity to Buy because recent product announcements and reiterations of financial targets suggest that its value may increase in the next years.
Snowflake’s Q1 summary
After the company revealed a larger-than-anticipated Q1 loss, Snowflake shares fell. SNOW predicted Q2 product revenue of $435 million to 440 million, up 71 to 73 percent year over year, which Bloomberg reported would be the lowest level since SNOW went public.
Citi reported that Q1 was a weaker Y/Y performance as a result of slowing growth. Concerns were voiced by Barclays on the effectiveness of SNOW’s consumption strategy.
Lower consumption, according to Stifel, is a result of the difficult operating climate.
Even though the market has a negative perception of SNOW’s Q2 profits, according to an analysis by SA contributor The Value Pendulum, SNOW will probably meet forecasts because of its strong net revenue retention rate and advantageous operating leverage effects.
SNOW stock price fell 53.6% year to date.
Featured Image: Megapixl @Stokkete
Author Jowi Kwasu 
