A survey of clients of software company Snowflake Inc. (NYSE: SNOW) has led the investment bank to raise its recommendation on the company’s stock. As a result, at the June 23 trading, SNOW shares rose 12.37% to $143.11. The market value was US$43.61 billion.
JPMorgan Chase’s annual survey showed that two-thirds of current Snowflake customers aim to increase their cloud spending in 2022, the highest of any company surveyed by JPMorgan Chase. Research by Snowflake Inc. (SNOW) included 120 CIOs managing over $100 billion in IT spending. Consequently, Snowflake has a good track record in the polls.
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Against this backdrop, JPMorgan analyst Mark Murphy raised Snowflake Inc. (SNOW) from neutral to overweight with a price target of $165.
SNOW is expected to increase free cash flow due to increased customer spending on the company’s cloud services. JPMorgan also pointed to Snowflake’s rare ability to increase sales despite its big business.
Additionally, Mark Murphy noted that due to the current decline in stock market indices, SNOW shares are only trading 20% above the IPO price. Snowflake Inc. (SNOW) operates under the favorable conditions of a growing demand trend for cloud IT.
At the same time, the company has the opportunity to become a leading cloud platform. The Snowflake Inc. (SNOW) advantage is a large number of customers: small organizations that do not have their own large IT systems. These customers often opt for a cloud-based solution with fast implementation and flexible payment options.
In Q1 2022, Snowflake’s product revenue grew 84% year-over-year to $394.4 million, and the number of customers exceeded 6,300, with 206 spending more than $1 million a year for Snowflake services.
SNOW’s 52-week high price is now $405.00, which is 62.59 percent more expensive than the stock’s current trading price. SNOW’s current selling price, however, is -37.43% less than its 52-week low of $110.26.