The stock is “at risk of a violent selloff” after it doubled last week from its IPO price of $120, Nandury said in a report cited by Bloomberg.
The shares closed Friday at $240, so Insight's target price indicates 27% potential downside. Snowflake at last check traded at $225, down 6.3%.
Snowflake began trading Wednesday as the largest ever software IPO - $3.36 billion, valuing the company at $33 billion.
The San Mateo, Calif., company sells storage, computing and cloud services to enterprises looking for efficient ways to manage data
“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.
The company isn’t profitable: For the six months ended July 31 Snowflake reported a loss of $171.3 million against a loss of $177.2 million in the year-earlier period.
Revenue for the period more than doubled to $242 million from $104 million.