Snowflake Stock Falls On Weak Guidance Amid Cloud Computing Slowdown

Snowflake (SNOW) reported a smaller-than-expected loss for the fourth quarter while revenue topped Wall Street targets. The Snowflake earnings report showed revenue outlook came in well below expectations, sending SNOW stock down.

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For the quarter ended Jan. 31, Snowflake said it lost 64 cents per share versus a 43-cent loss a year earlier. Analysts polled by FactSet expected Snowflake to report a loss of 66 cents a share.

The company reports results using generally accepted accounting principles, or GAAP. Snowflake does not break out adjusted earnings in its releases. Still, SNOW stock analysts projected an adjusted loss of 5 cents per share.

Third-quarter revenue climbed 53% to $589 million, the software maker said. Analysts had predicted revenue of $575.9 million.

SNOW stock fell 6.8% to near 144 in extended trading on the stock market today.

SNOW Stock Outlook

For the current quarter ending in April, Snowflake expects product revenue in a range of $568 million to $573 million. Meanwhile, analysts had expected $582.1 million.

SNOW stock had advanced 7% in 2023 heading into the Snowflake earnings report.

Snowflake sells data analytics and management tools that run on cloud-computing platforms such as Amazon Web Services, part of Amazon.com (AMZN). Because Snowflake’s business model is consumption-based rather than subscription-based, bearish investors have raised concerns over a possible U.S. recession curbing demand.

Weak guidance from Datadog (DDOG), also an AWS partner, recently pressured SNOW stock.

SNOW stock holds a Relative Strength Rating of 52 out of a best-possible 99, according to IBD Stock Checkup.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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