We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Consensus Estimate for first-quarter fiscal 2027 earnings has remained steady at 32 cents per share over the past 30 days, indicating a year-over-year increase of 33.33%. The consensus mark for first-quarter revenues is pegged at $1.32 billion, indicating an increase of 26.85% from the year-ago quarter’s reported figure.
SNOW’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, with the average earnings surprise being 18.78%.
Let’s see how things have shaped up for SNOW prior to this announcement:
Snowflake’s fiscal first-quarter performance is expected to have reflected an expanding clientele, driven by strong AI capabilities and a rich partner base.
SNOW continues to benefit from strong adoption and increasing usage of its platform, as reflected by the net revenue retention rate of 125% in the fourth quarter of fiscal 2026. In the same quarter, Snowflake added 740 net new customers, up 40% year over year. The company now has 733 customers spending more than $1 million annually, up 27% year over year, and 56 customers spending more than $10 million annually, up 56% year over year. This trend is expected to have continued in the to-be-reported quarter as well.
Expanding clientele is expected to have benefited the top-line growth. For the first quarter of fiscal 2027, Snowflake expects product revenues in the range of $1.262-$1.267 billion. The projection range indicates year-over-year growth of 27%. The Zacks Consensus Estimate for fiscal first-quarter 2027 product revenues is pegged at $1.26 billion, indicating 26.88% growth from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for customers with trailing 12-month product revenues greater than $1 million is currently pegged at 758, indicating a 25.08% increase from the year-ago quarter. The consensus mark for total customers is pegged at 13,758, indicating an increase of 430 net new customers in the to-be-reported quarter.
However, lower gross margins from new AI product investments and a 150-basis point free cash flow headwind from the Observe acquisition are expected to hurt SNOW in the to-be-reported quarter.
SNOW Shares Underperform Sector
Snowflake shares have plunged 21.5% in the year-to-date period against the Zacks Computer & Technology sector’s increase of 17.5%. The company’s shares have outperformed the Zacks Internet Software industry’s decline of 11.5% over the same time frame.
SNOW Stock’s Performance
Image Source: Zacks Investment Research
SNOW Stock Is Currently Overvalued
Snowflake stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
In terms of forward 12-month Price/Sales, SNOW is trading at 9.4X, higher than the Internet Software industry’s 3.81X.
Valuation: SNOW Is Trading at a Premium
Image Source: Zacks Investment Research
Snowflake Rides on Strong Portfolio
SNOW’s expanding portfolio has been noteworthy. In 2026, Snowflake launched more than 430 product capabilities, including Snowflake Intelligence, Cortex Code, Snowflake OpenFlow, and Snowflake Postgres. These innovations enhanced the platform’s usability and scalability.
The company’s AI-driven products, particularly Snowflake Intelligence and Cortex Code, have been a major growth driver. In 2026, Snowflake Intelligence, which provides enterprise-grade agent capabilities, has been adopted by more than 2,500 accounts within just three months of its launch, nearly doubling quarter over quarter. Cortex Code, a transformational coding agent, has been embraced by more than 4,400 customers, enabling faster development and deployment of AI-powered applications.
SNOW Suffers From Stiff Competition
Despite Snowflake’s expanding portfolio and partner base, the company is facing stiff competition from the likes of major players like Oracle (ORCL - Free Report) , Amazon (AMZN - Free Report) , and Alphabet (GOOGL - Free Report) , which are also expanding their footprint in the AI space.
Oracle’s expanding portfolio has been noteworthy. In April 2026, Oracle expanded AI capabilities in Oracle AI Database@Google Cloud, introducing Gemini-powered agents for natural language data access, enhancing enterprise insights, productivity and multicloud data innovation.
Amazon’s AI initiatives gained significant momentum during the first quarter of 2026. Amazon’s cloud computing platform, Amazon Web Services' chips business, including Graviton, Trainium, and Nitro, exceeded a $20 billion annual revenue run rate and is growing triple-digit percentages year over year.
Alphabet has been growing rapidly in the booming cloud-computing market. In the first quarter of 2026, Alphabet's cloud revenues surged 63% year over year to roughly $20 billion. This acceleration is largely fueled by enterprise adoption of generative AI offerings such as Gemini, with revenue from AI-based cloud products growing nearly 800% year over year.
Conclusion
Despite SNOW’s robust portfolio, challenging macroeconomic uncertainties, rising AI costs, and stiff competition from hyperscale cloud providers remain headwinds. The stretched valuation also makes the stock risky right now.
View the Zacks #1 Rank List
Image: Bigstock
Should You Buy, Sell, or Hold SNOW Stock Before Q1 Earnings Release?
Key Takeaways
Snowflake (SNOW - Free Report) is set to release first-quarter fiscal 2027 results on May 27.
The Zacks Consensus Estimate for first-quarter fiscal 2027 earnings has remained steady at 32 cents per share over the past 30 days, indicating a year-over-year increase of 33.33%. The consensus mark for first-quarter revenues is pegged at $1.32 billion, indicating an increase of 26.85% from the year-ago quarter’s reported figure.
SNOW’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, with the average earnings surprise being 18.78%.
Let’s see how things have shaped up for SNOW prior to this announcement:
Snowflake Inc. Price and EPS Surprise
Snowflake Inc. price-eps-surprise | Snowflake Inc. Quote
Factors to Note for SNOW’s Q1
Snowflake’s fiscal first-quarter performance is expected to have reflected an expanding clientele, driven by strong AI capabilities and a rich partner base.
SNOW continues to benefit from strong adoption and increasing usage of its platform, as reflected by the net revenue retention rate of 125% in the fourth quarter of fiscal 2026. In the same quarter, Snowflake added 740 net new customers, up 40% year over year. The company now has 733 customers spending more than $1 million annually, up 27% year over year, and 56 customers spending more than $10 million annually, up 56% year over year. This trend is expected to have continued in the to-be-reported quarter as well.
Expanding clientele is expected to have benefited the top-line growth. For the first quarter of fiscal 2027, Snowflake expects product revenues in the range of $1.262-$1.267 billion. The projection range indicates year-over-year growth of 27%. The Zacks Consensus Estimate for fiscal first-quarter 2027 product revenues is pegged at $1.26 billion, indicating 26.88% growth from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for customers with trailing 12-month product revenues greater than $1 million is currently pegged at 758, indicating a 25.08% increase from the year-ago quarter. The consensus mark for total customers is pegged at 13,758, indicating an increase of 430 net new customers in the to-be-reported quarter.
However, lower gross margins from new AI product investments and a 150-basis point free cash flow headwind from the Observe acquisition are expected to hurt SNOW in the to-be-reported quarter.
SNOW Shares Underperform Sector
Snowflake shares have plunged 21.5% in the year-to-date period against the Zacks Computer & Technology sector’s increase of 17.5%. The company’s shares have outperformed the Zacks Internet Software industry’s decline of 11.5% over the same time frame.
SNOW Stock’s Performance
Image Source: Zacks Investment Research
SNOW Stock Is Currently Overvalued
Snowflake stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
In terms of forward 12-month Price/Sales, SNOW is trading at 9.4X, higher than the Internet Software industry’s 3.81X.
Valuation: SNOW Is Trading at a Premium
Image Source: Zacks Investment Research
Snowflake Rides on Strong Portfolio
SNOW’s expanding portfolio has been noteworthy. In 2026, Snowflake launched more than 430 product capabilities, including Snowflake Intelligence, Cortex Code, Snowflake OpenFlow, and Snowflake Postgres. These innovations enhanced the platform’s usability and scalability.
The company’s AI-driven products, particularly Snowflake Intelligence and Cortex Code, have been a major growth driver. In 2026, Snowflake Intelligence, which provides enterprise-grade agent capabilities, has been adopted by more than 2,500 accounts within just three months of its launch, nearly doubling quarter over quarter. Cortex Code, a transformational coding agent, has been embraced by more than 4,400 customers, enabling faster development and deployment of AI-powered applications.
SNOW Suffers From Stiff Competition
Despite Snowflake’s expanding portfolio and partner base, the company is facing stiff competition from the likes of major players like Oracle (ORCL - Free Report) , Amazon (AMZN - Free Report) , and Alphabet (GOOGL - Free Report) , which are also expanding their footprint in the AI space.
Oracle’s expanding portfolio has been noteworthy. In April 2026, Oracle expanded AI capabilities in Oracle AI Database@Google Cloud, introducing Gemini-powered agents for natural language data access, enhancing enterprise insights, productivity and multicloud data innovation.
Amazon’s AI initiatives gained significant momentum during the first quarter of 2026. Amazon’s cloud computing platform, Amazon Web Services' chips business, including Graviton, Trainium, and Nitro, exceeded a $20 billion annual revenue run rate and is growing triple-digit percentages year over year.
Alphabet has been growing rapidly in the booming cloud-computing market. In the first quarter of 2026, Alphabet's cloud revenues surged 63% year over year to roughly $20 billion. This acceleration is largely fueled by enterprise adoption of generative AI offerings such as Gemini, with revenue from AI-based cloud products growing nearly 800% year over year.
Conclusion
Despite SNOW’s robust portfolio, challenging macroeconomic uncertainties, rising AI costs, and stiff competition from hyperscale cloud providers remain headwinds. The stretched valuation also makes the stock risky right now.
Snowflake currently carries a Zacks Rank #3 (Hold), which implies that investors should wait for a favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.