Snowflake Books a Big Beat, but Warns it Likely Won't Become a Pattern; Shares Fairly Valued

Snowflake’s third quarter was an outstanding one, as the company surpassed FactSet consensus on its revenue guidance. Snowflake cautioned that the magnitude of its beat was unusual and shouldn't be expected in the future--as the outperformance was a result of surprising upside manifested from some of its largest, most mature customers. These surprises were disclosed as more one-time in nature and might lead to more moderate future customer growth rates. As a result, we are maintaining our fair value estimate of $295 for no-moat Snowflake. Shares are up 14% after-hours to around $353 per share, which still leaves Snowflake in 3-star, fairly valued territory.