Apps & Software

Earnings Previews: Snowflake, UiPath

a snowflake
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In mid-morning trading on Tuesday, the Dow Jones industrials were down 0.06%, the S&P 500 down 0.27% and the Nasdaq 0.17% lower.

After U.S. markets closed on Monday, Zoom Video easily beat the consensus earnings per share (EPS) estimate and surpasses the consensus revenue estimate in the bargain. Zoom also raised adjusted EPS and revenue guidance for the year. Oddly, the stock traded down by about 6.6% Tuesday morning.

Before U.S. markets opened on Tuesday, Lowe’s also beat estimates on the top and bottom lines but issued downside guidance for full-year earnings and sales. Shares traded up about 2.4%.

Palo Alto Networks and VFC are on deck to report quarterly results later on Tuesday. Then the following morning, look for reports from Kohl’s and Xpeng.

The big report due after markets close Wednesday will come from Nvidia. Here is our look at what is driving the stock and what analysts expect the company to report.

The following two companies are also reporting quarterly later on Wednesday.

Snowflake

Over the past 12 months, cloud-based data platform provider Snowflake Inc. (NYSE: SNOW) has seen its share price rise by nearly 28%. Among all U.S. tech sector stocks, the stock is one of the most overvalued, with a price-to-earnings multiple of more than 300 for the next 12 months. Gross margins of 65% over the past year are among the tech sector’s best.

The company’s software-as-a-service model keeps attracting new customers, and those customers are spending more. Some of that is due to Snowflake’s AI capabilities, and if that aspect of the business is brought forward, valuations could go through the roof.

Of 42 brokerages covering the stock, 12 rate it at Hold and 28 have a Buy or Strong Buy rating. At a recent share price of around $181.00, the stock trades above its median price target of $180.00. At the high price target of $500.00, the upside potential is 176%.

Fiscal first-quarter revenue is forecast at $608.7 million, which would be up 3.3% sequentially and by 44.1% year over year. Snowflake is expected to post adjusted EPS of $0.05 in the quarter, down 64% sequentially but up from a year-ago loss per share of $0.01. For the full 2024 fiscal year ending in January, Snowflake is expected to post adjusted EPS of $0.59, up 136% year over year, on sales of $2.88 billion, up 39.2%.

Snowflake stock trades at 305.7 times estimated 2024 earnings, 172.4.2 times estimated 2025 earnings of $1.05 and 121.5 times estimated 2026 earnings of $1.48 per share. Its 52-week trading range is $110.27 to $205.66. The company does not pay a dividend, and the total shareholder return for the past year was 27.30%.

UiPath

UiPath Inc. (NYSE: PATH) makes and sells a robotic automation platform. Over the past 12 months, shares have dipped by about 1.3%, including a share price increase of 44% since early November. Earlier this month, the company announced new features that it says “help customers discover, automate, and operate at scale with AI-powered automation.” The stock has added about 18% in the nine trading days since the announcement. More AI magic?

Of 21 analysts covering the stock, nine have a Buy or Strong Buy rating and 12 more have Hold ratings. At a share  price of around $17.30, the upside potential based on a median price target of $20.00 is 13.5%. At the high price target of $27.50, the upside potential stretches to nearly 59%.

UiPath is expected to report first-quarter revenue of $271.24 million, down 12.1% sequentially but 10.7% higher year over year. Analysts are forecasting EPS of $0.02, down 85.4% sequentially and up from a year-ago loss per share of $0.02. For the full 2024 fiscal year ending in January, estimates call for EPS of $0.23, up 67.4%, and sales of $1.25 billion, up 18.5%.

The company’s stock trades at 74.0 times expected 2024 earnings, 56.9 times estimated 2025 earnings of $0.30and 42.8 times estimated 2026 earnings of $0.41 per share. Its 52-week range is $10.40 to $22.30. UiPath does not pay a dividend, and the total shareholder return for the past year is 0.38%.

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