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SNOW Stock Trades Higher Than Industry at 14.2 P/S: Buy, Sell or Hold?
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Key Takeaways
SNOW trades at a 14.2X P/S, well above the industry's 5.9X, indicating potential overvaluation concerns.
SNOW added 125 features and expanded AI adoption across top global clients.
Partnerships with Microsoft and NVIDIA strengthen SNOW's AI positioning.
Snowflake (SNOW - Free Report) shares are overvalued, as suggested by a Value Score of F. In terms of the forward 12-month Price/Sales (P/S), SNOW is trading at 14.2X, a premium compared with the Zacks Internet – Software industry’s 5.9X.
SNOW is trading at a premium against its competitors like Teradata (TDC - Free Report) and MongoDB (MDB - Free Report) . Teradata and MongoDB shares are currently trading at P/S of 1.3X and 7.5X, respectively.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
SNOW shares have jumped 37.6% year to date, outperforming the Zacks Computer and Technology sector’s appreciation of 10.6% and the industry’s return of 19.3%. Teradata and MongoDB have declined 29.1% and 3.7%, respectively, in the same time frame.
Snowflake is benefiting from growing enterprise adoption of the AI Data Cloud and broader use of Cortex AI. Large enterprises are increasingly relying on SNOW to support flexible, scalable data and AI workloads. The outperformance can be attributed to these factors.
SNOW Stock Performance
Image Source: Zacks Investment Research
The stock is currently trading above the 50-day and 200-day moving averages, indicating a bullish trend.
SNOW Stock Trades Above 50-Day & 200-Day SMAs
Image Source: Zacks Investment Research
With shares outperforming the industry and a stretched valuation metrics, the key question is whether SNOW still offers compelling upside at current levels. Let’s take a closer look.
Snowflake’s Strong and Innovative Portfolio Drives Prospects
Snowflake’s expanding AI Data Cloud portfolio continues to drive enterprise adoption. Cortex AI, SNOW’s built-in layer for running and customizing large language models securely on the platform, now sees weekly usage from over 5,200 accounts. This growing demand for AI-ready infrastructure and native model access contributed to a 26% year-over-year increase in first-quarter product revenues to $996.8 million. The Zacks Consensus Estimate for second-quarter product revenues is pegged at $1.04 billion, implying 25.4% growth year over year.
Snowflake has rolled out more than 125 new features, including upgrades to Generation 2 Warehouses and Adaptive Compute, aimed at boosting performance and automating scale for large workloads. SNOW also launched Openflow, a managed service that simplifies batch and streaming data ingestion, enabling real-time pipelines for AI deployments.
Building on its agentic AI roadmap, Snowflake introduced Snowflake Intelligence and Data Science Agent to help automate queries, accelerate model workflows and unify access to structured and unstructured data. These additions are expected to expand AI use cases and reinforce SNOW’s positioning in enterprise infrastructure.
To broaden developer reach, Snowflake acquired Crunchy Data to introduce an enterprise-grade Postgres offering. This addition is expected to support transactional workloads on the AI Data Cloud and attract Postgres-native developers.
Expanding Clientele and Partnerships Support SNOW’s Momentum
Snowflake continues to deepen adoption across finance, healthcare, manufacturing and media. JPMorgan Chase is improving decision-making by consolidating financial data on the AI Data Cloud. AstraZeneca is unlocking operational insights through integrated healthcare data on SNOW. Siemens is boosting manufacturing efficiency by connecting IT and OT systems on the platform. Samsung Ads and Dentsu are using SNOW to activate audience data for more personalized campaigns. Canva is simplifying workflows and accelerating product development by scaling on the AI Data Cloud.
Snowflake ended the first quarter with 11,578 total customers, up 18% year over year, including 606 customers contributing over $1 million in trailing 12-month product revenue. The Zacks Consensus Estimate for second-quarter customer count is pegged at 11,961 customers, up 16.7% year over year, implying continued enterprise momentum.
Snowflake benefits from a strong partner ecosystem that includes Microsoft (MSFT - Free Report) , Amazon, ServiceNow and NVIDIA, alongside consulting leaders like EY and S&P Global. Microsoft remains central to SNOW’s AI strategy, working closely with Snowflake to simplify development and enhance cross-cloud interoperability. The Acxiom partnership allows brands to unify identity and audience data in the AI Data Cloud, enabling more personalized, AI-powered marketing. As GenAI adoption scales, Microsoft’s co-innovation efforts continue to reinforce Snowflake’s enterprise positioning.
SNOW Offers Positive View for Q2 and FY26
For the second quarter of fiscal 2026, Snowflake expects product revenues in the range of $1.03-$1.04 billion, indicating year-over-year growth of 25%. For fiscal 2026, Snowflake projects product revenues to grow 25% year over year to $4.32 billion.
The Zacks Consensus Estimate for second-quarter fiscal 2026 revenues is pegged at $1.09 billion, indicating 24.91% year-over-year growth. The consensus mark for fiscal 2026’s revenues is pegged at $ 4.52 billion.
The Zacks Consensus Estimate for second quarter earnings is currently pegged at 26 cents per share, unchanged over the past 30 days. This indicates an increase of 44.44% year over year.
How Should Investors Play SNOW Stock?
Snowflake’s expanding customer base, ongoing platform enhancements and deep network of partners position it well for long-term growth. However, competitive pressure remains a key risk, with hyperscale cloud providers like AWS, Azure and Google Cloud offering overlapping capabilities.
Snowflake also faces mounting competition from data cloud and analytics vendors like Teradata and MongoDB, which are broadening capabilities and gaining traction. Rising infrastructure costs, especially related to GPUs for AI workloads, add to the margin pressure. Stretched valuation also remains a concern.
Image: Bigstock
SNOW Stock Trades Higher Than Industry at 14.2 P/S: Buy, Sell or Hold?
Key Takeaways
Snowflake (SNOW - Free Report) shares are overvalued, as suggested by a Value Score of F. In terms of the forward 12-month Price/Sales (P/S), SNOW is trading at 14.2X, a premium compared with the Zacks Internet – Software industry’s 5.9X.
SNOW is trading at a premium against its competitors like Teradata (TDC - Free Report) and MongoDB (MDB - Free Report) . Teradata and MongoDB shares are currently trading at P/S of 1.3X and 7.5X, respectively.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
SNOW shares have jumped 37.6% year to date, outperforming the Zacks Computer and Technology sector’s appreciation of 10.6% and the industry’s return of 19.3%. Teradata and MongoDB have declined 29.1% and 3.7%, respectively, in the same time frame.
Snowflake is benefiting from growing enterprise adoption of the AI Data Cloud and broader use of Cortex AI. Large enterprises are increasingly relying on SNOW to support flexible, scalable data and AI workloads. The outperformance can be attributed to these factors.
SNOW Stock Performance
Image Source: Zacks Investment Research
The stock is currently trading above the 50-day and 200-day moving averages, indicating a bullish trend.
SNOW Stock Trades Above 50-Day & 200-Day SMAs
Image Source: Zacks Investment Research
With shares outperforming the industry and a stretched valuation metrics, the key question is whether SNOW still offers compelling upside at current levels. Let’s take a closer look.
Snowflake’s Strong and Innovative Portfolio Drives Prospects
Snowflake’s expanding AI Data Cloud portfolio continues to drive enterprise adoption. Cortex AI, SNOW’s built-in layer for running and customizing large language models securely on the platform, now sees weekly usage from over 5,200 accounts. This growing demand for AI-ready infrastructure and native model access contributed to a 26% year-over-year increase in first-quarter product revenues to $996.8 million. The Zacks Consensus Estimate for second-quarter product revenues is pegged at $1.04 billion, implying 25.4% growth year over year.
Snowflake has rolled out more than 125 new features, including upgrades to Generation 2 Warehouses and Adaptive Compute, aimed at boosting performance and automating scale for large workloads. SNOW also launched Openflow, a managed service that simplifies batch and streaming data ingestion, enabling real-time pipelines for AI deployments.
Building on its agentic AI roadmap, Snowflake introduced Snowflake Intelligence and Data Science Agent to help automate queries, accelerate model workflows and unify access to structured and unstructured data. These additions are expected to expand AI use cases and reinforce SNOW’s positioning in enterprise infrastructure.
To broaden developer reach, Snowflake acquired Crunchy Data to introduce an enterprise-grade Postgres offering. This addition is expected to support transactional workloads on the AI Data Cloud and attract Postgres-native developers.
Expanding Clientele and Partnerships Support SNOW’s Momentum
Snowflake continues to deepen adoption across finance, healthcare, manufacturing and media. JPMorgan Chase is improving decision-making by consolidating financial data on the AI Data Cloud. AstraZeneca is unlocking operational insights through integrated healthcare data on SNOW. Siemens is boosting manufacturing efficiency by connecting IT and OT systems on the platform. Samsung Ads and Dentsu are using SNOW to activate audience data for more personalized campaigns. Canva is simplifying workflows and accelerating product development by scaling on the AI Data Cloud.
Snowflake ended the first quarter with 11,578 total customers, up 18% year over year, including 606 customers contributing over $1 million in trailing 12-month product revenue. The Zacks Consensus Estimate for second-quarter customer count is pegged at 11,961 customers, up 16.7% year over year, implying continued enterprise momentum.
Snowflake benefits from a strong partner ecosystem that includes Microsoft (MSFT - Free Report) , Amazon, ServiceNow and NVIDIA, alongside consulting leaders like EY and S&P Global. Microsoft remains central to SNOW’s AI strategy, working closely with Snowflake to simplify development and enhance cross-cloud interoperability. The Acxiom partnership allows brands to unify identity and audience data in the AI Data Cloud, enabling more personalized, AI-powered marketing. As GenAI adoption scales, Microsoft’s co-innovation efforts continue to reinforce Snowflake’s enterprise positioning.
SNOW Offers Positive View for Q2 and FY26
For the second quarter of fiscal 2026, Snowflake expects product revenues in the range of $1.03-$1.04 billion, indicating year-over-year growth of 25%. For fiscal 2026, Snowflake projects product revenues to grow 25% year over year to $4.32 billion.
The Zacks Consensus Estimate for second-quarter fiscal 2026 revenues is pegged at $1.09 billion, indicating 24.91% year-over-year growth. The consensus mark for fiscal 2026’s revenues is pegged at $ 4.52 billion.
Snowflake Inc. Price and Consensus
Snowflake Inc. price-consensus-chart | Snowflake Inc. Quote
The Zacks Consensus Estimate for second quarter earnings is currently pegged at 26 cents per share, unchanged over the past 30 days. This indicates an increase of 44.44% year over year.
How Should Investors Play SNOW Stock?
Snowflake’s expanding customer base, ongoing platform enhancements and deep network of partners position it well for long-term growth. However, competitive pressure remains a key risk, with hyperscale cloud providers like AWS, Azure and Google Cloud offering overlapping capabilities.
Snowflake also faces mounting competition from data cloud and analytics vendors like Teradata and MongoDB, which are broadening capabilities and gaining traction. Rising infrastructure costs, especially related to GPUs for AI workloads, add to the margin pressure. Stretched valuation also remains a concern.
SNOW currently carries a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point to start accumulating the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.