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The analysts made a move after another downward guidance revision from Snowflake earlier this week. The guide down “leaves us with less conviction in near and long term growth and growing competition from MSFT & Databricks creating incremental execution headwinds,” they said in a client note.
Analysts are also concerned about elevated valuation as shares trade at “~15x CY24 EV/Sales (an ~84% premium to the HWG comp group).”
The SNOW stock was cut yesterday at Rosenblatt as analysts moved to Neutral from Buy.
“Snowflake has seen slower growth and sales productivity since Easter. Besides ongoing deal scrutiny and cloud optimization, older customers are re-evaluating data retention policies. This has resulted in customers reducing storage requirements (say from 5yrs to 3yrs), which impacts Snowflake’s storage revenue and compute activity,” they wrote in a note.
Snowflake shares are down half a percent in pre-open Friday.
