SNOW Stock Plunges On Fiscal 2023 Revenue Growth Guidance

Snowflake earnings on Wednesday showed a narrower-than-expected loss for the January quarter while revenue topped estimates. But the company’s fiscal 2023 revenue forecast merely edged by expectations, sending SNOW stock tumbling.

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Snowflake (SNOW) released fourth-quarter earnings after the market close. In extended trading on the stock market today, shares of the software maker plunged 27% to near 193.55.

While SNOW stock offers stellar revenue growth, it trades at a high multiple despite a recent correction in software stocks.

Snowflake said fourth-quarter revenue jumped 101% to $384 million from a year earlier, slowing from 110% growth in the October quarter. Analysts had estimated Snowflake revenue at $373 million.

Snowflake Narrows Its Losses

Snowflake stock reported a loss of 43 cents a share using generally accepted accounting principles, or GAAP, compared with a loss of 70 cents per share a year earlier. Analysts expected the company to report a loss of 50 cents a share.

Snowflake stock does not break out adjusted earnings in its earnings releases. Analysts estimated a 3-cent profit on an adjusted basis.

In addition, Snowflake announced the acquisition of Streamlit. Terms were not disclosed.

Snowflake stock had retreated 22% in 2022 heading into the earnings report.

SNOW Stock: Large Customer Growth Continues

In addition, Snowflake said it now has 184 customers with “trailing 12-month product revenue greater than $1 million,” up from 148 such customers as of Oct. 31.

For full-year fiscal 2023 which ends in January, Snowflake forecast product revenue of $1.89 billion at the midpoint of its forecast, edging by analyst estimates of $1.87 billion.

Snowflake pulled off the largest initial public offering ever by a software company in September 2020. The Snowflake IPO raised $3.4 billion.

The software maker owns a Relative Strength Rating of 38 out of a best-possible 99, according to IBD Stock Checkup.

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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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