Rosenblatt’s Blair Abernethy maintains a Buy rating on Snowflake Inc (NYSE:SNOW) with a price target of $180.
Snowflake announced its intention to offer $2 billion in convertible notes, due in 2027 and 2029, Abernethy wrote in an analyst note.
The Bozeman, Montana-based data storage company currently has $3.9 billion in cash and no debt, he said. “In our view, the company is issuing the proposed Notes from a position of financial strength,” Abernethy added.
Net proceeds will likely go toward general corporate purposes (i.e., a share buyback program, M&A or strategic technology investments), the analyst said.
Abernethy noted the proposed transaction as a net positive for Snowflake. It should provide the company with additional capital and flexibility as it attempts to accelerate its cloud data platform and products.
At this juncture, Abernethy left his estimates unchanged.
Price Action: Snowflake stock is down 1% at $112 at last check Tuesday.
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