Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
Shares of Snowflake (SNOW 8.36%) were up about 10% as of 2:15 p.m. ET on Monday, after an analyst had some positive things to say about this investment opportunity.
Technically speaking, Piper Sandler analyst Brent Bracelin lowered the price target for Snowflake stock from $200 per share to $194 per share, according to The Fly. The market could have taken this as a negative. But there’s a reason why the market is choosing to take this as good news instead.
Bracelin anticipates a season of slower growth for the massive cloud computing industry, of which Snowflake is a major player. However, even with this slowing-growth outlook, Bracelin still feels Snowflake can beat the market over the next year. And taking everything into account, the analyst only lowered the stock’s price target by 3%.
In other words, Bracelin’s price target takes negatives into consideration and still implies roughly 56% upside from where Snowflake stock traded before this morning’s jump.
For what it’s worth, Snowflake’s management is anticipating a slowdown as well, at least relatively speaking. Revenue for the first three quarters of its fiscal 2023 was up nearly 77% from the same period of its fiscal 2022. However, for fiscal 2024, management only expects 47% year-over-year growth.
Snowflake’s management shared these things over a month ago. Therefore, Bracelin’s comments today don’t really reflect new information, which is why I believe the market is getting a little too excited today.
Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Snowflake. The Motley Fool has a disclosure policy.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Making the world smarter, happier, and richer.
Market data powered by Xignite.
