rewrite this title Stifel cuts Snowflake stock price target on margin concerns By Investing.com

Investing.com – Stifel lowered its price target on (NYSE:SNOW) shares to $225 from $280 while keeping a Buy rating on the stock. Shares currently trade at $172.50, down over 21% year-to-date, with the company reporting earnings in just two days on February 25.

The firm said investor expectations for fourth-quarter product revenue have been recalibrated following recent stock performance and management commentary indicating a 3% beat should be considered solid, compared to the prior quarter’s 5% upside.

Stifel noted that fourth-quarter fiscal 2026 operating margin guidance of 7% implies significant sequential margin compression, though the firm expects operating margin outperformance of approximately 250 basis points mirroring the rest of fiscal 2026.

The firm said strong bookings, net revenue retention of 125%, and robust migration activity should enable management to guide fiscal 2027 product revenue growth in the mid-20% range. Stifel estimates that maintaining fiscal 2026 incremental product revenue additions flat in fiscal 2027 would result in approximately $5.5 billion in product revenue, up 24% and roughly in line with consensus estimates.

Stifel said management remains committed to sustained margin improvement as recent investments become increasingly productive in coming quarters.

In other recent news, Snowflake Inc. has been the focus of several analyst updates and company developments. TD Cowen adjusted its price target for Snowflake to $270, maintaining a Buy rating, as it anticipates a stronger fourth-quarter performance. Similarly, KeyBanc revised its target to $235 while retaining an Overweight rating, highlighting positive survey results from Snowflake’s customers and partners, driven by AI advancements and increased product adoption. Jefferies reiterated a Buy rating with a $300 price target, citing Snowflake as a significant beneficiary of artificial intelligence in the software sector, with notable revenue performance obligations growing by 37%.

Additionally, United Rentals has deployed an AI-powered Business Intelligence Agent using Snowflake’s platform across its extensive network of branches, enhancing data analysis capabilities for its teams. Meanwhile, Snowflake faces potential competition from Google’s new BigQuery feature, which allows global data queries, challenging Snowflake’s unified data analysis proposition. These developments reflect a dynamic period for Snowflake, with both opportunities and competitive pressures shaping its market presence.

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