Please ensure Javascript is enabled for purposes of website accessibility

Why Snowflake Stock Surged Today

By Joe Tenebruso - Mar 26, 2021 at 8:10PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Analysts are excited about the cloud data company's growth prospects.

What happened

Shares of Snowflake (SNOW -8.75%) popped 8.3% Friday, following bullish analyst remarks. 

So what

Evercore analyst Kirk Materne placed an outperform rating on Snowflake's stock. He sees the data warehousing specialist's shares climbing to $311, or more than 32% higher than their current price of $235.

A rising digital bar chart.

Snowflake's shareholders could be in for handsome gains, according to Evercore's analysts. Image source: Getty Images.

Materne highlighted Snowflake's massive addressable market, which management pegs at roughly $80 billion. "We believe there are few software firms over the last decade that have as large a growth opportunity as Snowflake," he said. 

Moreover, Materne argued that although its shares may appear expensive based on short-term metrics, Snowflake offers investors an attractive risk-to-reward profile based on its long-term expansion potential. 

Now what 

With its shares trading for roughly 60 times its projected sales in the year ahead, Snowflake certainly is not cheap. But if you believe its cloud-based data management opportunity is as large as management says it is, it could be worth it to place Snowflake on your watch list. If the recent sell-off in premium-priced growth stocks continues, a chance to buy this cloud data leader at a better price could present itself in the coming weeks.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Snowflake Inc. Stock Quote
Snowflake Inc.
SNOW
$144.51 (-8.75%) $-13.85

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
345%
 
S&P 500 Returns
119%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.