3 Snowflake Analysts On Cloud Data Stock's Potential: 'Unique Technology Advantage'

Snowflake Inc SNOW shares were gaining ground on Monday and are off to a hot start on the public market after the stock's initial public offering priced at $120 in mid-September. 

The cloud data warehousing company far exceeded its initial IPO target range of $75 to $85 per share, and the stock has continued to soar on the NYSE.

Snowflake shares more than doubled on their first day of trading and have held on to most of those gains nearly a month later.

Related Link: Why It's Unlikely Warren Buffett Is Actually Investing In Snowflake

The $3.4-billion IPO was the largest software IPO in history, more than tripling the previous record. Investors must now determine what to expect from the company in the long run.

Several of Snowflake's IPO underwriters finally weighed in on the stock on Monday following a mandatory quiet period.

Snowflake's Massive Addressable Market: Truist Securities analyst Joel Fishbein said the company has a clear vision and purpose given that companies are drowning in data.

“We believe that the company possesses a unique technology advantage that will give them a dominant competitive position in the data cloud in both the short and long term,” Fishbein said.

Piper Sandler analyst Brent Bracelin said Snowflake’s technology addresses a $300-billion enterprise data market.

“SNOW has built a new cloud-native software layer that has the potential to redefine and modernize the enterprise data stack,” the analyst said.

Snowflake's Unparalleled Growth Outlook: Stifel analyst Brad Reback said Snowflake has market-leading technology and “numerous drivers to sustain 50%+ growth.”

Snowflake is disrupting the data warehousing market, and this can be seen in its hypergrowth at scale, the anayst said: 100% year-over-year on a $500-million-plus revenue run rate, and a trailing 12 months net dollar retention rate of greater than 150% over the last eight quarters.

Oppenheimer analyst Ittai Kidron is projecting a roughly 45% compound annual growth rate in customer account additions — and a long-term expansion of Snowflake’s international business.

“Snowflake's successful land-and-expand business model (>150% retention rate) is focused on acquiring new enterprise customers looking to adopt a cloud strategy (fastest growing part of the Big Data market, ~23% CAGR) to extract more value from their data,” the analyst said. 

SNOW Ratings, Price Targets: Truist has a Buy rating and $350 target.

  • Stifel has a Hold rating and $250 target.
  • Piper Sandler has an Overweight rating and $264 target.
  • Oppenheimer has an Outperform rating and $300 target
Posted In: Brad RebackBrent BracelinIttai KidronJoel FishbeinOppenheimerPiper SandlerStifelTruist SecuritiesAnalyst ColorPrice TargetInitiationTop StoriesAnalyst RatingsTech