On Friday, Guggenheim Securities adjusted their stance on Snowflake Inc . (NYSE: NYSE:SNOW), upgrading the stock from Sell to Neutral. The firm has decided to withdraw its price target for the cloud-based data warehousing company. The change in rating comes after a period of significant challenges for Snowflake, which the analyst believes will persist and continue to concern investors.
Snowflake, despite facing hurdles, is still considered a valuable asset by the analyst, especially if it maintains its position as a strong cloud-based data warehouse provider. While the company's efforts to penetrate adjacent markets have yet to yield the expected results, any future success in these areas could enhance its value.
The analyst noted that the market had previously assumed Snowflake's success in these endeavors was guaranteed, but recent performance disappointments and the sudden resignation of CEO Frank Slootman have tempered expectations.
Since the announcement of its fiscal fourth quarter 2024 results on February 28, where the company guided fiscal year 2025 to 22% growth, Snowflake's shares have seen a 30% drop. This decline occurred over 9 of the last 12 trading days, compared to the IGV index, which was flat during the same period. The drop in share price was more pronounced than the IGV index's 5-day decline.
The analyst's outlook is somewhat optimistic for the near term, particularly for the first fiscal quarter. Checks with Guggenheim Securities Industry partners indicate a positive sentiment that could translate into increased consumption in the upcoming quarters.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.