Shares in Snowflake (SNOW) fell on a weaker-than-expected outlook for fiscal 2024 earnings on Thursday. SNOW stock plunged a double-digit percentage.
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After the close on Wednesday, the software maker reported a weaker-than-expected fourth-quarter loss as revenue beat Wall Street targets.
For the quarter ended Jan. 31, Snowflake said it lost 64 cents per share compared to a loss of 43 cents a year earlier. Analysts polled by FactSet had expected Snowflake to post a loss of 66 cents per share.
Snowflake Stock: international growth is slowing
The company reports its results using generally accepted accounting principles, or GAAP. Snowflake does not detail adjusted earnings in its publications. Still, stock analysts at SNOW were forecasting an adjusted loss of 5 cents per share.
Third-quarter revenue soared 53% to $589 million, the software maker said. Analysts had forecast revenue of $575.9 million.
“SNOW reported a strong fourth quarter with revenue growth of 54% above Street at 50%,” TD Cowen analyst Derrick Wood said in a note to clients. “That said, mixed international performance, shorter term engagements and slower ramps from new clients have led management to lower the guide for fiscal year 2024 from 47% to 40%.”
SNOW stock fell 12.2% to 135.60 in afternoon trading on the stock market today.
SNOW stock outlook
For the current quarter ending April, Snowflake expects product revenue to be between $568 million and $573 million. Meanwhile, analysts expected $582.1 million.
SNOW stock was up 7% in 2023 before Snowflake’s earnings report.
Snowflake sells data management and analysis tools that run on cloud computing platforms such as Amazon Web Services, which is part of Amazon.co.uk (AMZN). Since Snowflake’s business model is consumption-based rather than subscription-based, bearish investors have raised concerns about a possible US recession dampening demand.
Low orientation of Datadog (DDOG), also an AWS partner, recently pressured SNOW stock.
The SNOW stock holds a relative strength rating of 52 out of the best possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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