SPRX - Snowflake's Conservative FY25 Guidance And CEO Transition Stir Analyst Debates: Optimism For AI Innovations Amid Cautious Forecasts | Benzinga
Snowflake Inc (NYSE:SNOW) shares are trading lower after the company reported fourth-quarter financial results, issued guidance, and announced a CEO transition Wednesday. Morgan Stanley downgraded the stock from Overweight to Equal-Weight following the report.
Oppenheimer analyst Ittai Kidron maintained Snowflake with an Outperform and lowered the price target from $240 to $220.
The analyst said Snowflake delivered a solid quarter, exceeding consensus revenue and EPS estimates, benefiting from high NRR, new customer adds, and large-customer traction. Yet, the fiscal 2025 product revenue guide was well below expectations, and they replaced the CEO.
The analyst is bullish, believing the outlook shortfall is driven by highly conservative guidance assumptions and contrary to recent consumption trends to minimize future revisions and set a more accessible bar for a new CEO.
The analyst noted this sets up Snowflake to deliver beats throughout the year and grow revenue closer to recent cRPO trends. Innovations around AI and the availability of additional services can provide additional uplift. Kidron projects first-quarter revenue and EPS of $784.3 million (prior $796.8 million) and $0.12 (prior $0.19).
Canaccord Genuity analyst Kingsley Crane reiterated the Buy rating with an unchanged $230 price target.
Snowflake shares are indicating down ~20% after hours as the company provided initial fiscal 2025 product revenue guidance of 22% Y/Y growth, de-emphasized its external $10 billion fiscal 2029 product revenue target, and announced that CEO Frank Slootman would step down with current SVP, AI Sridhar Ramaswamy taking over the role.
Crane noted several factors indicating that the business is performing and will perform better than at first blush. He flagged record RPO growth, including cRPO growth of 28.5%, net retention at 131%, declining the least it has in ...