Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Third Upgrade This Month: Jefferies Moves Snowflake to Buy as Valuation is 'Back to Reality'

Stock Markets Jun 28, 2022 09:26
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Senad Karaahmetovic

Jefferies analyst Brent Thill upgraded shares of Snowflake (NYSE:SNOW) to Buy from Hold after a major pullback in the high-growth stock in recent months.

Thill also hiked the price target to $200.00 per share from $125.00 to reflect “continued execution on the platform expansion story.”

The analyst also urged investors to “stick with the story over the long-term given its large end markets and plenty of room to double its value while growing into a reasonable multiple.”

“We are upgrading SNOW after a significant compression on its multiple in the last 6-8 months, in part driven by a broader sector drawdown and by continued execution and strength in top-line growth,” Thill wrote in a client note.

The analyst highlighted best-in-class fundamentals, large and growing end-markets, high-quality growth, and “back to reality” valuation.

“We believe current valuations offer an attractive entry point for the stock given its long-term targets. The stock price has declined significantly in recent months, down 63% from its 52-week high and down 57% YTD vs. the IGV down 29%. Its multiple has gone through a sizable contraction over the past few months and now trades at 16x EV/CY23E rev on 54% growth (NET 13x on 36%, DDOG 16x on 37%, ZS 16x on 36%). The co recently reaffirmed its CY28E rev target of $10B, implying a 26% 7-year CAGR which we believe to be very achievable on conservative assumptions,” Thill added.

Snowflake shares are up 3% in pre-market Tuesday.

Third Upgrade This Month: Jefferies Moves Snowflake to Buy as Valuation is 'Back to Reality'
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email