Snowflake price forecast: JPMorgan sees a 30% upside

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Written on Jun 23, 2022

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JPMorgan upgrades Snowflake to "overweight" with a price target of $165.
Analyst Mark Murphy explained the bullish view in a note on Thursday.
Shares of the American cloud company are down roughly 55% for the year.

Shares of Snowflake Inc (NYSE: SNOW) are up 10% on Thursday after a JPMorgan analyst turned bullish on the cloud computing–based data warehousing company.

Snowflake could be a $165 stock

Mark Murphy upgraded Snowflake to “overweight” this morning and coupled a $165 price target to the stock that translates to a 30% upside from its previous close.

His reasons for the upbeat outlook go well beyond attractive valuation. Murphy is convinced the pent-up demand will continue rapid growth in revenue and that Snowflake will turn free cash flow positive sooner than the current expectations.

Net-net, Snowflake is benefitting from demonstrable secular tailwinds while also exhibiting an Elite-Rule-of-79 and positive cash flow for fiscal 2023 based on estimates, setting up an attractive risk/reward dynamic.

The stock down more than 55% year-to-date.

Why else does he like Snowflake stock?

Murphy is also bullish on Snowflake Inc because a recent JPMorgan survey confirmed the existing and potential customers are likely to spend big on its platform. The analyst wrote:

Snowflake enjoys excellent standing among customers and recently laid out a clear long-term vision at its Investor Day in Las Vegas toward cementing its position as a critical emerging platform layer of the enterprise software stock.

The NYSE-listed firm also won big praise in the CIO survey as a software company with an “impressive vision”. In its latest reported quarter, Snowflake noted a massive 85% YoY growth in revenue to beat the FactSet consensus by $8.70 million.