Shares in Snowflake tumbled Thursday on a weaker-than-expected outlook for fiscal 2024 revenue. SNOW stock plunged by a double-digit percentage.
After the close Wednesday, the software maker reported a smaller-than-expected loss for the fourth quarter while revenue topped Wall Street targets.
For the quarter ended Jan. 31, Snowflake said it lost 64 cents per share versus a 43-cent loss a year earlier. Analysts polled by FactSet expected Snowflake to report a loss of 66 cents a share.
Snowflake Stock: International Growth Slows
The company reports results using generally accepted accounting principles, or GAAP. Snowflake does not break out adjusted earnings in its releases. Still, SNOW stock analysts projected an adjusted loss of 5 cents per share.
Third-quarter revenue climbed 53% to $589 million, the software maker said. Analysts had predicted revenue of $575.9 million.
"SNOW reported a solid Q4 with product growth of 54% above Street at 50%," TD Cowen analyst Derrick Wood said in a note to clients. "That said, mixed international performance, shorter duration commitments and slower ramps from new customers caused management to lower fiscal 2024 guide from 47% to 40%."
SNOW stock sank 12.2% to 135.60 in afternoon trades on the stock market today.
SNOW Stock Outlook
For the current quarter ending in April, Snowflake expects product revenue in a range of $568 million to $573 million. Meanwhile, analysts had expected $582.1 million.
SNOW stock had advanced 7% in 2023 heading into the Snowflake earnings report.
Snowflake sells data analytics and management tools that run on cloud-computing platforms such as Amazon Web Services, part of Amazon.com. Because Snowflake's business model is consumption-based rather than subscription-based, bearish investors have raised concerns over a possible U.S. recession curbing demand.
Weak guidance from Datadog, also an AWS partner, recently pressured SNOW stock.
SNOW stock holds a Relative Strength Rating of 52 out of a best-possible 99, according to IBD Stock Checkup.
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