Key points
- Snowflake shares have risen nearly 50% over the past three months, showing impressive growth.
- With a market capitalization of $67.8 billion and an RSI of 64.78, Snowflake shares are not yet considered overbought.
- The stock is now trading above a critical resistance level near $204, potentially signaling a shift in momentum if the stock can hold this level as support.
- 5 stocks we like better than Snowflake
Shares of Snowflake Inc. NYSE: SNOWa cloud-based data storage, processing and analytics company, has been impressive lately, with its shares up nearly 50% over the previous three months.
Over the past year, its shares have risen nearly 40%, rising steadily over the months, and are now trading near the upper region of its 52-week range. In that time the technology company saw its market capitalization rise to $67.8 billion. It has a relative strength index (RSI) of 64.78, indicating that the stock is not in overbought territory.
Furthermore, from a technical analysis perspective, the stock is preparing for a breakout on a longer time frame as it consolidates above crucial moving averages near a critical breakout level.
So, with many market-leading tech names trading at 52-week highs, fresh off a blowout, let’s take a look at Snowflake stock, a name potentially poised to get in on the action.
What is snowflake?
Snowflake Inc. is a cloud-based data storage, processing and analytics company known as of 2021 for its non-centralized business model. Operating globally, it offers the data cloud, a suite of tools that allows customers to centralize data, improve analytical capabilities and facilitate information sharing.
The company has demonstrated significant growth potential, driven by its strong product roadmap in the data cloud software space. Projecting an annual revenue growth rate of more than 30% through 2029, Snowflake has significantly increased its share of enterprise customers within a sizable and growing market while steadily improving profitability.
In 2023, the company’s shares rose 38%, outperforming the S&P 500 Index. Snowflake’s latest quarterly earnings, reported on Nov. 29, revealed earnings per share (EPS) of 25 cents, beating estimate consensus rating of nine cents, on revenue of $734.20 million, higher than analysts’ projections.
With estimated earnings per share of 18 cents for the next quarter and a history of consistently beating EPS estimates, Snowflake should continue its strong performance. While the company has not officially confirmed its next earnings release date, it could come as soon as March 6, based on previous reporting patterns.
Analysts like the stock
Snowflake has earned a spot on the Most Updated Companies list, a list of companies that analysts have updated most frequently over the past ninety days. Therefore, it should come as no surprise that SNOW has a “Moderate Buy” rating based on 27 analyst ratings. Of the 27, 19 rated the stock as a “buy”, six as a “hold” and only two as a “sell”.
Most recently, Truist Financial raised its target on SNOW from $210 to $230, and JMP Securities reiterated its “market outperform” rating with a price target of $212.
The stock currently has a consensus price target of $197.75, expecting a slight downside. The high estimate is $250 and the low estimate of the name is $105.
Shares are trading above significant resistance
Earlier in the week, Snowflake shares were trading above a critical resistance area near $204. This level has held firm as resistance since 2022 and serves as a potential inflection point and momentum shift for the stock.
As the stock is trading above its key moving averages and a significant resistance zone, both investors and traders will want to see the stock turn this zone into new support. If SNOW can successfully base above previous resistance, a higher time momentum shift could occur and the stock could likely experience strong upward momentum during the quarter.
Before you consider Snowflake, you’ll want to hear it.
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