Snowflake Rallies After Wolfe Research Starts It as Outperform By


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By Sam Boughedda — Shares of Snowflake Inc (NYSE:) rallied 7.3% on Monday after Wolfe Research analyst Allan Verkhovski initiated coverage on the stock with an outperform rating and $250 price target.

Verkhovski said in his note to investors that they are very excited about the potential for meaningful revenue outperformance after they built a waterfall model that calls for 50% growth in CY24.

“We see the potential for SNOW to become the 4th hyperscaler (it is growing faster than AWS at the same size and scale) with the best management team,” wrote the analyst.

Verkhovski also pointed to his firm’s free cash flow model as a significant reason for their positive view of the stock.

“We have gone to great lengths to build a model with realistic FCF upside, and we believe investors can get comfortable with 22%/24% FCF margin in CY23/CY24 (FCF growing 60% Y/Y in CY24),” added the Wolfe Research analyst.

He concluded, “For those looking to “top-grade” software portfolios, we think that asset is SNOW and the time is now.


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