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Snowflake Inc. (SNOW) Stock Sinks As Market Gains: Here's Why

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Snowflake Inc. (SNOW - Free Report) closed at $203.81 in the latest trading session, marking a -0.86% move from the prior day. The stock fell short of the S&P 500, which registered a gain of 0.08% for the day. Meanwhile, the Dow lost 0.26%, and the Nasdaq, a tech-heavy index, added 0.36%.

Heading into today, shares of the company had gained 3.54% over the past month, lagging the Computer and Technology sector's gain of 4.29% and outpacing the S&P 500's gain of 2.4% in that time.

The investment community will be paying close attention to the earnings performance of Snowflake Inc. in its upcoming release. It is anticipated that the company will report an EPS of $0.17, marking a 21.43% rise compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $757.98 million, indicating a 28.69% increase compared to the same quarter of the previous year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $0.79 per share and a revenue of $2.79 billion, representing changes of +216% and +35.05%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Snowflake Inc. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Snowflake Inc. is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Snowflake Inc. currently has a Forward P/E ratio of 261.24. For comparison, its industry has an average Forward P/E of 35.77, which means Snowflake Inc. is trading at a premium to the group.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 57, placing it within the top 23% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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