Abernethy is optimistic about Snowflake’s earnings report for the fiscal 2022 first quarter ended April 30 that's due out on May 26.
“Given the healthy IT spending environment so far this year, the accelerating digital transformation trends, and the strong first-quarter performance from the leading cloud service providers, we expect Snowflake to meet and possibly exceed our 93% year-over-year product revenue growth estimate,” Abernethy wrote in a commentary.
“We are expecting total Q1 revenue of $209 million, which is growth of 92% YOY (it was 117% in Q4), non-GAAP operating income of negative $47 million and adjusted net income of negative $45 million.”
Snowflake recently traded at $225.67, up 6.12%, but shares have slid 9% over the past six months.
“We expect Snowflake to demonstrate a continued strong net expansion rate, likely in the 150% range, just below the impressive 168% it achieved in Q4,” Abernethy said.
That will come “as new customers added over the last year significantly expand their second-year usage plans and drive higher value contract renewals.”
TheStreet.com founder Jim Cramer discussed Snowflake in a commentary last month.
In March, Evercore ISI analyst Kirk Materne initiated coverage of Snowflake with an outperform rating and a $311 price target.
He cited a potential addressable market for Snowflake's data warehousing division of $78 billion by 2024. "We believe there are few software firms that over the last decade have as large a growth opportunity as Snowflake," Materne said.