Snowflake stock price forecast ahead of Q1 earnings report

The Snowflake (NYSE: SNOW) stock price is in a tight range as investors wait for the company’s third earnings release as a public company. The shares are trading at $229, which is 46% below their all-time high of $428.

Snowflake earnings

Snowflake is a technology company backed by Warren Buffet. The firm offers data warehousing solutions to hundreds of companies like Blackrock, Adobe, Instacart, and Albertsons, among others. The stock surged to an all-time high of $428 last year as demand for high-growth cloud companies surged. This year, however, the shares have dropped by more than 12% as investors have rotated from fast-growing tech stocks. Indeed, the Vanguard Value ETF has outperformed the Vanguard Growth ETF in the past few months.

The company will be in the spotlight on Wednesday after it unveils its first-quarter results. Analysts expect the company to report revenue of $213 million and a loss of about $0.16 per share. This performance will be better than the company’s previous guidance of between $190 million and $200 million. 

There is also a high probability that the company will deliver better results than what analysts expect. According to Factset, 86% of all companies in the S&P 500 reported better-than-expected earnings per share data in the ongoing earning season. 76% of these companies have reported better revenue than expected.

In the most recent quarter, Snowflake reported that its revenue increased by 116% to $178 million. During the quarter, the company added companies like Zoominfo, Western Union, Mastercard,  and Foursquare, among others. In the upcoming earnings, investors will mostly focus on its revenue growth and overall guidance. 

Analysts are generally optimistic about Snowflake. Early this month, analysts at Goldman Sachs and Rosenblatt upgraded their rating from neutral to buy. In the same period, those at Jefferies maintained their rating at hold. Other analysts bullish on the Snowflake stock price are from UBS, Barclays, and Deutsche Bank. 

Snowflake stock price analysis

The four-hour chart shows that the Snowflake stock price has bounced back after it declined to the year-to-date high of $185. The stock has managed to move above the 25-day exponential moving average, which is a bullish sign. It is also forming a small bullish flag pattern and is slightly below the 23.6% Fibonacci retracement level. The shares have also formed what looks like an inverted head and shoulders pattern, which is usually a bullish sign. Therefore, there is a possibility that the stock will jump after the first-quarter earnings. If this happens, the next key target will be the 38.2% retracement at $278.