Evercore ISI Raises Price Target for Snowflake Inc. to $250, Citing Resurgence in Demand for Cloud Data Management
On Monday, Evercore ISI, a leading financial research and investment banking firm, increased its price target for Snowflake Inc. to $250 from the previous $235. This upward revision comes as the firm’s analyst points to a survey of 15 large Snowflake partners, which suggests a resurgence in demand for cloud data management. As a result, Evercore ISI predicts higher estimates for Snowflake in 2024.
The analyst at Evercore ISI expects Snowflake to report modestly higher fourth-quarter revenues than the current consensus. Estimates for the company’s fourth-quarter revenues are $754.8 million, slightly above the Street’s estimate of $760.6 million. Additionally, the operating margin predictions are optimistic, with Evercore ISI’s figure at 4.1% compared to the Street’s estimate of 4.9%.
Looking ahead to FY25, the analyst anticipates an initial revenue guidance range of approximately 28-30%. While a cautious approach is taken due to ongoing optimization headwinds, the improved macroeconomic conditions and positive feedback from partners could result in a ‘beat and raise’ scenario. This sets the stage for upward revisions in estimates throughout the year.
Despite the potential for volatility due to the significant year-to-date increase in share price, Evercore ISI maintains that Snowflake represents one of the top hyper-growth narratives in the software sector. The firm believes Snowflake’s growth trajectory and the likelihood of an upward adjustment in FY25 and FY26 forecasts support its confident outlook.
Evercore ISI’s revised price target of $250 is based on a 20x enterprise value to CY25 revenue multiple. This reflects the firm’s confidence in Snowflake’s growth potential and the potential for an upward adjustment in forecasts for fiscal years 2025 and 2026. Overall, the assessment underscores a solid spending environment and the potential for revenue acceleration in FY25 for Snowflake.
With this positive outlook and the company’s consistent innovation in cloud data management, Snowflake Inc. remains a notable player in the software sector as it looks to the future with anticipation.
Analyst comment
Positive news: Evercore ISI Raises Price Target for Snowflake Inc. to $250, Citing Resurgence in Demand for Cloud Data Management
As an analyst, I expect Snowflake’s market to experience growth in the coming years, driven by increased demand for cloud data management and the company’s positive financial outlook. This news reflects a strong spending environment and the potential for revenue acceleration in FY25. The revised price target of $250 indicates confidence in Snowflake’s growth potential.
