On Thursday, Deutsche Bank (ETR:DBKGn) adjusted its outlook on Snowflake Inc . (NYSE:SNOW), reducing the share price target from $250 to $220, while continuing to endorse the stock with a Buy rating. The revision reflects a response to recent quarterly results, which raised more questions than they answered, and the intensifying competition in the industry.
Deutsches analyst acknowledged the challenges Snowflake faces, particularly the growing rivalry with a key Independent Software Vendor (ISV) as their offerings become more similar.
Despite these hurdles and the subsequent reaction in Snowflake's stock price, the firm reaffirms its Buy rating. The rationale behind this stance is the long-term potential of Snowflake's cloud-agnostic platform, which is seen as a significant enabler for data-driven decision-making, including artificial intelligence.
The firm believes in Snowflake's capacity to increase profitability and free cash flow over time steadily. This confidence is backed by the company's market positioning and the analyst's projections.
The revised price target of $220 is based on an 18x multiple of the company's expected calendar year 2025 revenue. This adjustment comes as a result of updated guidance from Snowflake and the firm's own financial forecasts.
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