From Nasdaq: 2025-05-26 13:28:00

Snowflake shares have gained 11.7% post Q1 fiscal 2026 results due to strong adoption and usage, with a net revenue retention rate of 124%. The company added 606 customers with $1 million+ revenue, up from 485 last year. Shares are up 29.5% YTD, outperforming the sector and industry.

However, Snowflake is currently overvalued with a Value Score of F and a high forward Price/Sales ratio of 13.9X. The company faces tough competition from major cloud providers like AWS and Azure. Rising expenses and stretched valuation are concerns for investors.

Snowflake’s expanding partner base, including Microsoft, Amazon, and Meta Platform, drives growth. Partnerships with Microsoft and NVIDIA enhance AI capabilities. Snowflake’s expanding portfolio with products like Apache Iceberg and Cortex AI is attracting new clients and driving customer engagement with AI and ML technology.

For Q2 and FY26, Snowflake expects product revenues to increase by 25%, with the Zacks Consensus Estimate projecting revenue growth of 24.60% and 24.06% for Q2 and FY26, respectively. Competition, rising expenses, and stretched valuation indicate a cautious approach for investors, with a Zacks Rank of #3 (Hold) for SNOW stock.



Read more at Nasdaq: Snowflake Rallies Post Q1 Earnings: Buy, Sell or Hold the Stock?