Snowflake Inc. (SNOW) shares tumbled Thursday despite delivering a third-quarter earnings beat that had analysts rushing to raise their price targets. Welcome to earnings season, where good news doesn't always translate to happy investors.
The Numbers Look Good
Snowflake reported adjusted earnings per share of 35 cents, comfortably ahead of the 31-cent consensus estimate. Revenue came in at $1.21 billion, topping expectations of $1.18 billion. Product revenue hit $1.16 billion, climbing 29% year over year.
The company's customer metrics showed healthy momentum too. Net revenue retention landed at 125%, and Snowflake now counts 688 customers generating more than $1 million in trailing 12-month product revenue. The company also reported 766 Forbes Global 2000 customers and remaining performance obligations totaling $7.88 billion, up 37% from last year.
CEO Sridhar Ramaswamy highlighted continued momentum across the company's data and AI initiatives, pointing to rapid adoption of Snowflake Intelligence and strength in strategic partnerships.
Analysts Still Bullish
The earnings beat prompted several analysts to bump up their price targets. Keybanc analyst Eric Heath maintained an Overweight rating and raised his target from $275 to $285. Baird analyst William Power kept an Outperform rating while lifting his target from $260 to $270. Cantor Fitzgerald analyst Thomas Blakey maintained an Overweight rating and increased his target from $275 to $278.
Price Action: At the time of writing, Snowflake shares were trading 10% lower at $238.36.
