Snowflake slips as Wolfe Research downgrades after weak outlook
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Snowflake (NYSE:SNOW) shares slipped around 0.5% in pre-market trading on Friday as Wolfe Research downgraded the data warehousing company after it lowered its outlook for the remainder of the fiscal year.
"Downgrading [Snowflake] to peer perform after another downward guidance revision leaves us with less conviction in near and long term growth and growing competition from [Microsoft (MSFT)] and Databricks creating incremental execution headwinds," Zukin wrote in an investor note.
Looking to the full-year, Snowflake (SNOW) now anticipates product revenue to be about $2.6B, below the previous view of $2.71B. Analysts were anticipating $2.71B in full-year product revenue.
The company also lowered its full-year adjusted operating margin to 5%, down from a previous view of 6%.
For the upcoming quarter, Snowflake (SNOW) expects product revenue to grow between 33% and 34% year-over-year to fall within a range of $620M and $625M, below the $646.3M analysts were expecting.
The Frank Slootman-led company also said it expects adjusted operating margin of around 2%.
Analysts are largely cautious on Snowflake (SNOW). It has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates SNOW a HOLD.