Snowflake Earnings: What To Look For From SNOW

Radek Strnad /
2022/11/29 4:09 am EST

Data warehouse-as-a-service Snowflake (NYSE:SNOW) will be reporting results tomorrow after market close. Here's what to expect.

Last quarter Snowflake reported revenues of $497.2 million, up 82.6% year on year, beating analyst revenue expectations by 6.4%. It was a strong quarter for the company, with exceptional revenue growth and a solid beat of analyst estimates. The company added 40 enterprise customers paying more than $1m annually to a total of 246.

Is Snowflake buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Snowflake's revenue to grow 61.1% year on year to $538.9 million, slowing down from the 109% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.05 per share.

Snowflake Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing three downward revisions over the last thirty days. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 6.11%.

Looking at Snowflake's peers in the data and analytics software segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. DigitalOcean delivered top-line growth of 36.5% year on year, beating analyst estimates by 2.81% and Commvault Systems reported revenues up 5.74% year on year, exceeding estimates by 0.81%. DigitalOcean traded up 3.83% on the results, and Commvault Systems was flat on the results. Read our full analysis of DigitalOcean's results here and Commvault Systems's results here.

There has been a stampede out of high valuation technology stocks and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 7.22% over the last month. Snowflake is down 11.1% during the same time, and is heading into the earnings with analyst price target of $212.00, compared to share price of $142.65.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.