Why Snowflake Stock Popped Today – The Motley Fool

Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
Shares of Snowflake (SNOW -4.38%) jumped 7.6% on Monday, following bullish analyst remarks. 
Wolfe Research analyst Alex Zukin placed an outperform rating on Snowflake’s stock. He sees the data warehousing leader’s share price climbing roughly 34% to $250, fueled by the shift from legacy data systems to cloud-based services.
“The business world is experiencing a data tsunami, with data available from a variety of sources,” Zukin said. Snowflake helps companies make better use of that data with lower upfront costs and the ability to scale their operations quickly. And with its cloud-native design, Snowflake’s tools integrate well with other cloud services.
Image source: Getty Images.
Moreover, Zukin noted that venture-backed start-ups are beginning to build services on Snowflake’s platform. That should help to increase the value of its ecosystem to customers and fuel its expansion.
Better still, Zukin expects Snowflake’s free cash flow to soar in the coming years. Thus, he argues that its stock’s premium valuation is warranted, particularly now that its shares have pulled back sharply from their highs back in November. 
Snowflake’s stock has shed more than half its value since its price soared above $400 per share late last year. Yet it’s arguably still not cheap. Snowflake’s shares currently trade for roughly 29 times analysts’ estimates for sales in fiscal 2023. 
Still, the cloud data star is growing rapidly. Snowflake’s revenue more than doubled to $1.2 billion in fiscal 2022, which ended on Jan. 31. And with the migration of data to the cloud still in its early innings, Snowflake is likely to increase its revenue and cash flow at an impressive clip for many years to come.

Trending

Romaisa Khan (TikTok Star) Age, Height, Biography, Family, Drama & More

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Market-beating stocks from our award-winning service.
Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 04/26/2022.
Discounted offers are only available to new members. Stock Advisor list price is $199 per year.
Calculated by Time-Weighted Return since 2002. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Making the world smarter, happier, and richer.

Market data powered by Xignite.

source