Snowflake draws bullish calls from Wall Street, though some analysts say stock is fully valued

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  • At least 19 investment banks initiated coverage of Snowflake on Monday, with price targets ranging from $214 to $350.
  • The stock rose 2.5% to close at $243.97.
  • Analysts agree that Amazon, Microsoft and Google are Snowflake’s top competitors, but they have differing views on how much of a threat those companies pose.



Frank Slootman wearing a suit and tie: Frank Slootman, CEO of Snowflake Inc. on Sept. 16th, 2020.


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Frank Slootman, CEO of Snowflake Inc. on Sept. 16th, 2020.

Less than a month after Snowflake debuted on the stock market with the biggest software IPO in history, Wall Street analysts are rushing to make predictions on the cloud database company, which is already valued at over $67 billion.

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At least 19 analysts initiated coverage of Snowflake on Monday following the post-IPO quiet period, according to reports collected by CNBC.

Among the nine buy ratings, the most bullish prediction came from Truist, which gave Snowflake a price target of $350, or 47% above Friday’s close.

Another nine analysts started coverage with the equivalent of a hold rating. Only Atlantic Equities recommends selling the shares, with a price target of $214.

Snowflake climbed 2.5% to $243.97 on Monday, a mostly strong day for tech stocks. The company, which sells cloud-based software to help companies store, process and visualize vast amounts of data, closed its IPO on Sept. 18, raising $4.2 billion. The stock more than doubled in its first day of trading but has been flat since, meaning only investors who got in at the IPO price have made much money so far.



a close up of a sign: Snowflake since IPO


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Snowflake since IPO

Bulls to bears

The predominant opinion is that Snowflake has plenty of business momentum as companies move from traditional on-premises databases into the cloud. Revenue increased more than 130% in the first half of the year

But some analysts are concerned that the

Wall Street Initiates Coverage on Snowflake

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Snowflake’s (SNOW) IPO on September 16th was one of, if not, the most highly anticipated IPOs of 2020. In the days before the initial public offering, the share price was expected to remain between $75 and $120. However, demand was so high that Snowflake’s shares opened for trading at $245 and even surged to $319 at one point on the first day of trading. Now, nearly a month since Snowflake went public, several banks have released their outlook on the company’s future.

Goldman Sachs analyst Heather Bellini initiated with a Buy rating and a $268 price target. In a research note, Bellini informs investors that cloud migration and stable data sharing are “strong secular tailwinds” that are driving increased adoption of Snowflake’s products. The analyst thinks that Snowflake will continue to replace current technologies for data warehousing.

Unlike Goldman Sachs, Credit Suisse initiated Snowflake with a Neutral rating and price target of $250. The analysts acknowledge that Snowflake is a “true-pioneer in cloud-native data analytics” and will be instrumental in helping businesses shift their operations towards a more data-centric approach. However, Snowflake’s current stock price already takes into account a significant amount of Snowflake’s future success resulting in initiation at a neutral rating.

Similar to Credit Suisse, J.P Morgan analysts initiated Snowflake with a Neutral rating and a $247 Dec 2021 price target. Analysts mention, at its core, Snowflake is a massively scalable, highly elastic solution for cloud-native data warehouses, that has begun to disrupt the space for cloud data management. Furthermore, analysts state “Snowflake’s cloud-agnostic multi-region solution, with intuitive and efficient data sharing capabilities, lays the foundation for a much broader vision of a new category called the Data Cloud, potentially leading to an open-ended market opportunity with strong inherent network effects.”

Morgan Stanley also initiated Snowflake at an

Forget Snowflake, These 3 Tech Stocks Are Better Buys Right Now

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Snowflake (NYSE:SNOW), a cloud data company, has received a lot of attention from investors lately, following its mid-September IPO. Investors have taken an interest in this tech stock because of its 133% revenue growth in the first half of this year, and the fact that the company believes it has a massive $81 billion total addressable market in the cloud data space. 

But despite Snowflake’s potential, there are a handful of other tech stocks that could be better long-term investments. To help you find a few, we asked three Motley Fool contributors for alternative Snowflake investments. They came back with Alteryx (NYSE:AYX), Zoom Video Communications (NASDAQ:ZM), and Amazon.com (NASDAQ:AMZN). Here’s why. 

A person pointing to a tablet screen.

Image source: Getty Images.

With access to more data than ever, businesses need a way to make sense of it

Brian Withers (Alteryx): Snowflake’s platform excels in capturing enterprise data and centralizing it in one place for users, but Alteryx takes that process one step further. It has a set of powerful and efficient tools that data analysts can use to make sense of massive amounts of data and derive insights to make informed decisions. Let’s look more closely at the business of this data analytics platform.

Founded in 1997, Alteryx has been serving the needs of its discerning customer base for more than two decades. The company has captured over 6,700 customers and has trailing-12-month revenues of $465 million. Similar to Snowflake, Alteryx’s customers spend more once they are on the platform, as measured by its 126% dollar-based net expansion rate in its most recent quarter. Management estimates Alteryx’s addressable market to be $49 billion, giving it less than a 1% share of this massive opportunity.

Last quarter, Alteryx’s growth hit a speed bump in the face of the coronavirus and companies pulling back

Snowflake Lower as Jefferies Initiates at Hold on Valuation

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Snowflake  (SNOW) – Get Report shares fell after Jefferies analyst Brent Thill initiated coverage of the cloud-services company with a hold rating and $250 share-price target.

He likes the company but not its valuation — about 51 times his 2022 revenue estimate and 21 times his best-case 2023 estimate. 

The San Mateo, Calif., company’s stock stands “ahead of its fundamentals,” Thill wrote in a commentary, according to Bloomberg.

Snowflake recently traded at $244.80, down 2.5%. It has more than doubled from its Sept. 15 IPO price of $120.

In addition to his concern about valuation, Thill noted that Snowflake faces intense competition in its field.

As for his overall bullishness, Thill likes Snowflake’s management team. It has a “proven track record of building from a base (today an $81 billion addressable market) to much larger total addressable markets over time.”

Last week, Summit Insights analyst Srini Nandury began coverage of Snowflake with a sell rating and a $175 share-price target. He, too, was concerned about valuation.

The stock is “at risk of a violent selloff” after its surge, he said in a report cited by Bloomberg.

“For the stock to work from the current levels, Snowflake needs to execute flawlessly quarter after quarter, and have to live up to lofty expectations and grow into its valuation,” Nandury said.

“While Snowflake’s management is stellar and is known for its execution, the odds of Snowflake’s stock faltering are high.”

The company represents the most expensive stock in the entire technology sector, Nandury said.

At the same time, it has “limited” unique qualities relative to its competitors and faces a stiff challenge from existing companies, he said.