Snowflake Inc stock (NYSE: SNOW) is up roughly 10% on Monday after the cloud computing-based data warehousing company received a positive note from Wolfe Research.
Analyst announces a $250 PT on Snowflake stock
Analyst Alex Zukin initiated Snowflake at “outperform” this morning with a price target of $250 that represents a 45% upside on its previous close. He wrote:
Snowflake is a potential game changer as it converts data management in cloud into a PaaS, enabling businesses to build applications natively on top of the platform, driving not just an ecosystem but a network effect that’ll propel it to the next level of growth.
A stellar management team and free cash flow growing at 60% YoY should earn Snowflake a premium multiple, the analyst added. He sees FCF margins at 22% and 24% over the next two years.
There’s plenty more to like about Snowflake Inc
According to Zukin, Snowflake could be the fourth big name in cloud computing after AWS, Azure, and Google Cloud. The NYSE-listed company had several VCs invest in companies built on its platform.
This was one of the most impactful learnings from our diligence, which we believe creates an important durable structural growth driver and competitive advantage that is not well understood.
Other reasons cited for the positive outlook include its growth rate that beats AWS when it was the same size. The strength of what Snowflake has to offer is evident in the fact that it turned Amazon – initially a competitor – into a partner.
Trading at more than 50% down from its high in mid-November, the stock is attractive from the valuation perspective as well, Zukin concluded.
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