Snowflake stock drops 12% post strong Q2 earnings, but guidance positive

From Nasdaq: 2024-08-22 12:27:00

Snowflake (SNOW) shares plummeted over 12% after second-quarter fiscal 2025 results, despite strong revenues of $829.3 million. Fiscal 2025 product revenue guidance of $3.36 billion surpasses previous estimates. Decreased operating and cash flow margins are expected due to higher GPU costs, impacting stock performance.

Snowflake beat earnings estimates with a 29% revenue increase in the fiscal second quarter. Net revenue retention rate for existing customers was at 127%, with 10,249 total customers. The extended share buyback program reflects strong liquidity. Q3 guidance expects product revenues in the $850-$855 million range with a 22% growth rate.

Snowflake’s stock valuation is stretched at this time, trading at a premium compared to the sector. Trading below the 50-day moving average indicates a bearish trend. Despite potential growth opportunities from an expanding portfolio, SNOW stock may be a risky short-term investment.

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Read more at Nasdaq: Snowflake Down Post Q2 Earnings: Is SNOW Stock a Buy on Dip?