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Snowflake Inc. (SNOW) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 min read

In the latest 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 gained 1.27%, and the Nasdaq, a tech-heavy index, added 0.28%.

Coming into today, shares of the company had gained 14.83% in the past month. In that same time, the Computer and Technology sector gained 10.27%, while the S&P 500 gained 9.34%.

Snowflake Inc. will be looking to display strength as it nears its next earnings release, which is expected to be August 24, 2022. The company is expected to report EPS of -$0.02, up 50% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $465.64 million, up 71.07% from the prior-year quarter.

SNOW's full-year Zacks Consensus Estimates are calling for earnings of $0.14 per share and revenue of $2.01 billion. These results would represent year-over-year changes of +600% and +65.18%, respectively.

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

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.16% higher. 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 right now. This valuation marks a premium compared to its industry's average Forward P/E of 46.12.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 136, putting it in the bottom 47% of all 250+ industries.

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

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


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Zacks Investment Research