Snowflake Inc. (SNOW) Gains Market But Lags Behind: What You Need To Know


IIn the last trading session, Snowflake Inc. (SNOW) closed at $168.68, marking a +0.48% move from the previous day. This change lagged the S&P 500’s 1.73% gain on the day. Meanwhile, the Dow Jones gained 1.27% and the Nasdaq, a technology-heavy index, added 0.28%.

As of today, the company’s shares have gained 14.83% over the past month. Over the same period, the IT & Technology sector gained 10.27%, while the S&P 500 gained 9.34%.

Snowflake Inc. will look to show strength ahead of its next earnings release, which is expected on August 24, 2022. The company is expected to post EPS of -$0.02, up 50% from in the quarter of the previous year. Meanwhile, our latest consensus estimate calls for revenue of $465.64 million, up 71.07% from the prior year quarter.

Zacks consensus estimates for the full year for SNOW call for earnings of $0.14 per share and revenue of $2.01 billion. These results would represent year-over-year variations of +600% and +65.18%, respectively.

Investors should also note any recent changes to analyst estimates for Snowflake Inc. These recent revisions tend to reflect the evolving nature of near-term business trends. With this in mind, we can view positive estimate revisions as a sign of optimism about the company’s business prospects.

Research indicates that these revisions to estimates are directly correlated to near-term stock price dynamics. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes into account these estimation changes and provides a clear and actionable scoring model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive track record of externally audited outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past 30 days, our consensus EPS projection has increased by 0.16%. Snowflake Inc. is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that Snowflake Inc. has a Forward P/E ratio of 1238.46 at this time. This valuation marks a premium to the sector’s average Forward P/E of 46.12.

The Internet – Software industry is part of the IT and technology sector. This group has a Zacks Industry Rank of 136, which places it in the bottom 47% of all 250+ industries.

The Zacks Industry Ranking assesses the strength of our industry groups by measuring the average Zacks Ranking of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and more, at Zacks.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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