To The Moon

$Snowflake(SNOW)$ is scheduled to announce its financial results for the first quarter of fiscal 2026 on 21 May 2025.

The consensus EPS forecast for Q1 2026 is $0.21. Analysts expect product revenue to be around $961 million, slightly above Snowflake's guidance.

Snowflake (SNOW) Last Positive Earnings Call Saw Share Price Gain 8.92%

Snowflake had a positive earnings call on 26 Feb 2025 which saw the share price went up by 8.92% since.

The earnings call highlighted strong revenue growth, high net revenue retention, significant product innovation, and expanded AI capabilities. However, there were challenges, including large customers exceeding contract capacity and needing to purchase on-demand, slower projected growth for Q1 due to leap year effects, and high stock-based compensation. Overall, the sentiment is positive given the strong growth and innovation, although tempered by some challenges.

Key Highlights from Snowflake's Fiscal Q4 2025 Earnings providing guidance for Q1 2026)

Strong Q4 2025 Performance: Revenue reached $986.8 million, a 27% year-over-year increase, surpassing analyst estimates.

Product revenue was $943.3 million, showing a robust 28% year-over-year growth, also exceeding expectations.

Remaining Performance Obligations (RPO) grew by 33% year-over-year to $6.9 billion, indicating healthy future contracted revenue.

Net Revenue Retention rate was a strong 126%, highlighting customer satisfaction and increased usage.

New Product Introductions

Snowflake introduced over 400 product capabilities to market, more than double the previous year, showing strong product innovation.

Positive Cash Flow and Margins

Q4 non-GAAP operating margin increased to 9%, and non-GAAP adjusted free cash flow margin was 43%.

Expansion of AI Capabilities

Introduced Cortex AI and expanded partnerships with Microsoft to incorporate OpenAI's models, making Snowflake the only platform hosting both Anthropic's and OpenAI's models.

Positive Guidance for Fiscal Q1 2026 : Snowflake anticipates product revenue between $955 million and $960 million, representing a year-over-year growth of 21% to 22%.

The company expects a non-GAAP operating margin of 5% for Q1 2026.

Full-Year Fiscal 2026 Guidance : Snowflake projects product revenue of approximately $4.28 billion, a 24% year-over-year increase.They anticipate a non-GAAP operating margin of 8% for the full fiscal year 2026.The company also expects a non-GAAP adjusted free cash flow margin of 25% for FY26.

Here Are Some Risk Factors To Watch From Previous Quarter

Large Customers Exceeding Contract Capacity : Several large customers ran out of capacity before their contract end date, choosing to purchase as they consume rather than renewing.

Q1 Revenue Growth Projections : Q1 product revenue is expected to grow only 21% to 22% year-over-year, partially due to the impact of leap year.

Stock-Based Compensation : Stock-based compensation as a percentage of revenue is expected to decrease from 41% to 37% in FY '26, which remains relatively high.

Snowflake (SNOW) Price Target

Based on 41 analysts from Tiger Brokers offering 12 month price targets for Snowflake in the last 3 months. The average price target is $204.98 with a high forecast of $440.00 and a low forecast of $115.00. The average price target represents a 13.24% change from the last price of $180.54.

The market reacted positively to Snowflake's Q4 2025 results and its initial guidance for fiscal year 2026, with the stock price soaring after the announcement. The guidance suggests continued strong growth, although a slight deceleration in the year-over-year product revenue growth rate compared to previous periods.

Technical Analysis - Exponential Moving Average (EMA)

Analysts generally have a positive outlook on Snowflake, with a consensus rating of "Buy" and price targets suggesting potential upside. However, some analysts also point to the company's high valuation and the need to maintain strong growth to justify it.

If we looked at how SNOW have been trading on the upside, it looks like investors are looking forward to the strong quarterly earnings report, not concerned about the high valuation now.

On the short interest side, we are not seeing any signs of investors selling off, or taking profits, this is despite valuation concerns raised by some analysts, but I expect some investors to start taking profits if there is any price surge post earnings from SNOW.

Summary

Snowflake upcoming report will provide more concrete data on the company's performance in the first quarter and any updates to its full-year guidance.

The focus on improving operating margins and free cash flow is likely viewed favorably by investors as the company aims for sustainable profitability.

Snowflake's emphasis on AI capabilities, including Cortex AI and partnerships with Microsoft to integrate OpenAI's models, positions them to capitalize on the growing demand for AI-powered data solutions.

Appreciate if you could share your thoughts in the comment section whether you think SNOW would be able to provide more concrete data on the guidance for full year as well as the performance for fiscal Q1 2026.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.