shares in snowflake (SNOW) plunged Thursday on a weaker-than-expected outlook for fiscal 2024 earnings. SNOW stock plummeted by a double-digit percentage.
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After the market close on Wednesday, the software maker reported a smaller-than-expected fourth-quarter loss as revenue beat Wall Street’s targets.
For the quarter ended Jan. 31, Snowflake said it lost 64 cents a share, up from a loss of 43 cents a year earlier. Analysts polled by FactSet expected Snowflake to report a loss of 66 cents per share.
Snowflake Stock: International Growth Slowing
The company reports results in accordance with generally accepted accounting principles, or GAAP. Snowflake does not report adjusted earnings in its disclosures. Still, SNOW equity analysts forecast an adjusted loss of 5 cents per share.
Third-quarter revenue rose 53% to $589 million, the software maker said. Analysts had forecast sales of $575.9 million.
“SNOW reported a solid fourth quarter with product growth of 54% versus Street at 50%,” said Derrick Wood, analyst at TD Cowen, in a note to clients. “However, mixed international results, shorter-dated commitments and slower ramps from new customers prompted management to lower guidance for fiscal 2024 to 40% from 47%.”
SNOW stock fell 12.2% to 135.60 in afternoon trading today.
SNOW Stock Outlook
For the current quarter ending April, Snowflake expects product sales to be in a range of $568 million to $573 million. Meanwhile, analysts had expected $582.1 million.
SNOW stock was up 7% in 2023 as it entered the Snowflake earnings report.
Snowflake sells data analysis and management tools that run on cloud computing platforms like Amazon Web Services, part of it Amazon.com (AMZN). Because Snowflake’s business model is consumption-based rather than subscription-based, bearish investors have raised concerns that a possible U.S. recession could dampen demand.
Weak leadership off data dog (DDOG), also an AWS partner, recently put pressure on SNOW stock.
According to the IBD Stock Checkup, SNOW stock has a relative strength rating of 52 out of 99 best possible values.
Follow Reinhard Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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