In pre-open trading on Thursday, Snowflake (NYSE:SNOW) shares fell roughly 5% after the data software company provided a softer-than-expected forecast.
According to reports, Snowflake surpassed the average analyst estimate of profits of USD 0.04 on sales of USD 539.07M by posting an EPS (Earnings per share) of USD 0.11 on revenue of USD 557 million. Revenue increased by 67% year over year (YoY), while the net revenue retention rate fell to 165% from 173% YoY.
Snowflake expects product sales for this quarter to be in the region of USD 535-540M, underperforming the USD 551.8M consensus and driving down stock prices. The business anticipates product sales of USD 1.92B for FY2023, which is in line with predictions. The business did increase its projected adjusted operating margin for the whole year from 2% to 3%.
The price objective was also decreased by Raymond James analysts, going from USD 197 per share to USD 180. Despite this, they continue to be optimistic about Snowflake stock for the reasons listed below. The price objective was reduced by Morgan Stanley analysts from USD 248 per share to USD 225 in order to reflect below-consensus fourth-quarter projections.