Data warehouse-as-a-service Snowflake (NYSE: SNOW) will be announcing earnings results tomorrow after the bell. Here’s what to look for.
Snowflake beat analysts’ revenue expectations by 4.6% last quarter, reporting revenues of $942.1 million, up 28.3% year on year. It was a very strong quarter for the company, with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ billings estimates. It added 32 enterprise customers paying more than $1 million annually to reach a total of 542.
Is Snowflake a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Snowflake’s revenue to grow 23.6% year on year to $957.5 million, slowing from the 31.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.18 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Snowflake has missed Wall Street’s revenue estimates three times over the last two years.
Looking at Snowflake’s peers in the data and analytics software segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Commvault Systems delivered year-on-year revenue growth of 21.1%, beating analysts’ expectations by 6.9%, and DigitalOcean reported revenues up 13.3%, topping estimates by 2.2%. Commvault Systems traded down 7.5% following the results.
Read our full analysis of Commvault Systems’s results here and DigitalOcean’s results here.
Stocks generally had a good 2024. The Fed fought high inflation and won without sending the economy into a recession, otherwise lovingly known as a soft landing. The US Central Bank is now cutting rates. That, plus the election of Donald Trump in November 2024, sent markets even higher, and while some of the data and analytics software stocks have shown solid performance, the group has generally underperformed, with share prices down 4.8% on average over the last month. Snowflake is down 3.7% during the same time and is heading into earnings with an average analyst price target of $196.33 (compared to the current share price of $170.79).
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
