Snowflake (SNOW) Stock Forecast & Price Target

Snowflake has demonstrated robust growth metrics, with New Annual Recurring Revenue (ARR) increasing by 11% year-over-year and a notable expansion in its customer base, now totaling 580 clients spending over $1 million in total trailing twelve months (TTM) product revenue, reflecting a 7% sequential increase. Additionally, the company reported a 33% year-over-year growth in Remaining Performance Obligations (RPO), amounting to $6.9 billion, while product revenue exceeded expectations by 3-4%, underpinned by strong performance in core offerings and new product integrations. Snowflake's strategic focus on innovative solutions such as Data Engineering, Snowpark, and AI/ML, coupled with a significant market opportunity and effective cost management, positions the company favorably for sustained future growth and increased free cash flow generation.

Snowflake's F1Q26 product revenue guidance of $957.5 million, representing a 21.5% year-over-year increase, fell slightly below market expectations, which may indicate a slowing growth trajectory for the company. Despite improvements in margins, the continued net losses since inception and the uncertainty surrounding profitability contribute to a negative outlook on the company's stock performance. Additionally, the volatility introduced by the consumption-based revenue model, coupled with intensifying competition as other firms advance their cloud capabilities, raises concerns about Snowflake's ability to maintain its competitive edge and consistent growth.