Stifel has trimmed its price target for Snowflake Inc. to $225 from $280 but left its Buy rating in place, signaling a reassessment of near-term margin prospects even as top-line indicators remain constructive. The firm noted the stock is trading at $172.50, down more than 21% year-to-date, and pointed out that Snowflake reports quarterly results in two days on February 25.
According to Stifel, investor expectations for fourth-quarter product revenue have shifted after recent stock performance and management comments. The analyst house emphasized that management appears to view a 3% beat on fourth-quarter product revenue as a solid result, versus the prior quarter’s 5% upside. That recalibration feeds into the firm’s updated outlook and reduced price target.
Stifel drew attention to the company’s fourth-quarter fiscal 2026 operating margin guidance of 7%, saying it implies notable sequential margin compression. Despite that implication, the firm expects Snowflake to outperform operating margin guidance by roughly 250 basis points, consistent with its view for the remainder of fiscal 2026.
On the revenue front, Stifel highlighted a number of constructive metrics. The firm cited strong bookings, a net revenue retention rate of 125%, and active migration activity as factors that should permit management to target product revenue growth in the mid-20% range for fiscal 2027. Using a scenario in which fiscal 2026 incremental product revenue additions remain flat in fiscal 2027, Stifel estimates Snowflake would generate approximately $5.5 billion in product revenue in fiscal 2027 - a 24% increase and roughly in line with consensus estimates.
Stifel also noted management’s ongoing commitment to sustained margin improvement, stating that recent investments should become increasingly productive in the coming quarters. That suggests the firm expects operating leverage to improve over time even if near-term guidance points to compression.
Other analysts and market developments add context to Stifel’s adjustments. TD Cowen lowered or adjusted its price target to $270 while retaining a Buy rating, anticipating a stronger fourth-quarter showing. KeyBanc moved its target to $235 and kept an Overweight rating, citing positive survey feedback from Snowflake customers and partners tied to AI-driven adoption. Jefferies reiterated a Buy stance and a $300 price target, identifying Snowflake as a notable beneficiary of artificial intelligence trends in software and pointing to a 37% growth in revenue performance obligations.
Corporate adoption examples and competitive dynamics were also highlighted. United Rentals has rolled out an AI-powered Business Intelligence Agent built on Snowflake’s platform across its broad branch network, a deployment that the firm said enhances data analysis capabilities for frontline teams. At the same time, Snowflake faces potential pressure from Google’s new BigQuery capability, which enables global data queries and poses a challenge to Snowflake’s value proposition around unified data analysis.
Collectively, these developments paint a picture of a company navigating both significant demand drivers - including AI-related adoption and strong retention metrics - and margin scrutiny alongside intensifying competition. Investors will likely be focused on how management addresses the operating margin guidance and whether revenue traction and investment productivity materialize as expected in the quarters ahead.