Snowflake shares (NYSE:SnowShares of the leading IT services provider of data management solutions have fallen about 28% since the beginning of the year. The decline reflects cuts in companies’ IT spending budgets and increased competition in the sector. However, analysts at Goldman Sachs and Jefferies see the decline as an opportunity for investors to buy the company’s shares at current levels.
SNOW stock on Goldman’s guilty plea list
Goldman Sachs added Snowflake shares to its list of Americas hot stocks on July 1, signaling that these stocks have the potential to outperform the market. Goldman analyst Kash Langan sees this selloff in Snowflake shares as an attractive buying opportunity.
Langan believes the company’s focus on speeding up product development will drive demand and drive revenue growth. The analyst predicts Snowflake’s revenue growth will accelerate again, to over 30% annually. He added that the company’s high free cash flow margins are not yet reflected in the current stock price.
The five-star analyst is bullish on SNOW’s prospects, and his $220 price target suggests a 54% upside potential from current levels.
SNOW stock ranks top in Jefferies data
Jefferies analyst Brent Till also sees Snowflake as a strong investment choice. The analyst called Snowflake stock one of his top data picks for the second half of 2024. Till cited multiple factors as catalysts, including AI opportunities, product innovation, stabilizing demand trends, and easier year-over-year comparisons.
Till believes that Snowflake’s growth will accelerate even without AI, driven by opportunities and ease of comparison in its core business. Till noted that Snowflake’s valuation has fallen. Snowflake’s stock valuation is now roughly in line with the industry average, making it a good time for investors to consider buying.
On July 1, Till reaffirmed his buy recommendation on SNOW shares with a $160 price target, suggesting a 12% upside potential from current levels.
Is Snowflake a good stock to buy?
The majority of analysts covering Snowflake stock have recommended it as a Buy. Snowflake stock has a Strong Buy consensus rating based on 25 Buy recommendations and 8 Hold recommendations. Analysts’ price target for Snowflake stock is $203.59, indicating an upside potential of 42.51%.
Disclosure
