Tuesday, October 7, 2025

Snowflake: Canaccord Drops Price Target From $360 to $210

Last week, Snowflake (NYSE: SNOW) reported its fourth-quarter fiscal 2022 financial results. The company saw its revenue grow 102% year over year to $359.6 million with a 72% gross margin, which puts their gross profits at $257.2 million. Even with 72% gross margins, the company reported a $152 million operating loss for the quarter.

For the fiscal 2022 full year, the company reported revenues of $1.14 billion, growing 106% year over year. The company maintained a healthy 70% gross margin or a $792.7 million gross profit. Though similar to the company’s fourth-quarter results, the company reported a $715 million operating loss.

The company provided first quarter and 2023 full-year guidance. The company expects revenue to come in between $383 and $388 million, which represents a 79% to 81% year-over-year increase for the first quarter of fiscal 2023. The company also expects to see full-year revenue of between $1.88 and $1.9 billion, which is 65% to 67% year-over-year growth. They also expect gross profit margins to be 74.5%.

Snowflake has seen its stock drop from $272 to $208 the week after its results, which equates to almost a 20% drop.

A number of analysts lowered their 12-month price target after the results, bringing the average 12-month price target down from US$385.23 to US$330.85. This represents a 58% upside to the current stock price. Snowflake currently has 29 analysts covering the stock, of which 5 analysts have strong buy ratings, 16 have buy ratings and the other 8 have hold ratings. The street high price target sits at US$575, which is a 175% upside to the current stock price.

In Canaccord’s fourth-quarter note, they reiterate their hold rating but slash their 12-month price target from US$360 to US$210, saying that the stock continues to be expensive (this was when the stock price was at US$264.69), but they did not “pick up any significant change in business trends or momentum with Snowflake’s Q4 release.”

They do admit that there seems to be a number of different parts with the platform enhancements, which will create “a bit of headwind to 2022 consumption,” and the idea that Snowflake is spending $800 million on a no-revenue developer asset. Canaccord believes that the stock being down so much in that morning pre-market seemed absurd, they do write “we’re in a tape where anything less than pristine, especially for high valuation stocks, is met with pretty aggressive selling.”

For the quarterly results, Snowflake saw another record bookings quarter which will help them deliver strong cash flow in the first quarter. The company ended the quarter with 184 customers crossing the $1 million annual spend threshold, adding 36 >$1 million annual spending customers this quarter. The company is now at a $1.4 billion revenue run-rate, with net revenue retention of 178% and current RPO growth of 88%. Lastly, Snowflake generated 12% free-cash-flow margins for the full year.

On the company’s guidance, Canaccord says that the roll-out of new platform improvements will negatively impact revenue as it provides customers with reduced storage costs. They expect this headwind to impact revenues by US$97 million for the year. Though management believes that over time, this change will hopefully lead to more workloads.

Canaccord says that these results are hard to overlook, writing, “You simply can’t find this type of profitable growth anywhere else in software.” Though they say that the bigger challenge here has always been valuation, as the company continues to trade at a “handsome premium to the space.” They do write that “if we fall back on our experience with this team and its time at NOW” as they believe that every time the stock had a guidance-related sell-off, it turned out to be a good buying opportunity. They do say that this time could be different though, and are a bit wary of “pushing folks into high-valuation software names in this tape.”


Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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