Snowflake (SNOW) is scheduled to report fourth-quarter fiscal 2026 results on Feb. 25. The Zacks Consensus Estimate for Q4 earnings is 27 cents per share, down 10% year-over-year. Revenue is expected to be $1.25 billion, up 26.85% from the year-ago quarter. Snowflake has beaten earnings estimates in the past four quarters with an average surprise of 33.27%.

Snowflake’s fiscal 2026 earnings estimate is $1.20 per share, up 44.58% year-over-year. Revenue is expected to be $4.65 billion, up 28.20% from the previous year. The company’s expanding clientele and strong AI capabilities are driving growth, with a net revenue retention rate of 125% and 12,621 customers in the fiscal third quarter of 2026.

Despite Snowflake’s strong performance, its stock has underperformed the Computer & Technology sector but outperformed the Internet Software industry. The stock is currently overvalued with a Value Score of F and a forward 12-month Price/Sales ratio of 10.19X compared to the industry’s 3.93X.

Snowflake’s success is attributed to its strong portfolio and partnerships with major companies like Alphabet, NVIDIA, SAP, and more. The company’s focus on AI capabilities and expanding product offerings have driven customer growth. Snowflake’s partnership with Google Cloud and native integration with NVIDIA have enhanced its offerings.

However, challenging macroeconomic uncertainties, rising AI costs, and competition from hyperscale cloud providers remain challenges for Snowflake. The stock currently carries a Zacks Rank #3 (Hold), indicating caution for investors. Despite its strong portfolio, the stretched valuation makes the stock risky at this time.

Read more at Nasdaq: Should You Buy, Sell, or Hold SNOW Stock Before Q4 Earnings Release?