Investing

Earnings Previews: Nvidia, Snowflake, Splunk

Snowflake

Over the past 12 months, cloud-based data platform provider Snowflake Inc. (NYSE: SNOW) has seen its share price plunge by more than 40%. The stock hit an all-time high in mid-November and has dropped more than 65% since. Like virtually every other growth company, the risk-off mood on Wall Street has hit investors in Snowflake. Salesforce.com, which had purchased $250 million in Snowflake stock at the 2020 initial public offering, sold most of its stake in the company last year and announced earlier this month that it had sold the last 5%.

Despite the plummeting stock price, analyst sentiment remains positive. Of 31 brokerages covering the stock, eight rate the shares a Hold and 22 have a Buy or Strong Buy rating. At a share price of around $141.50, the upside potential based on a median price target of $280.00 is 98%. At the high price target of $530.00, the upside potential is 275%.

Fiscal first-quarter revenue is forecast at $413.01 million, up 7.6% sequentially and 80% year over year. Snowflake is expected to post break-even earnings in the quarter, down from $0.12 per share sequentially but better than the loss of $0.11 per share a year ago. For full fiscal 2023, which ends in January, Snowflake is currently expected to post adjusted EPS of $0.16, up from the year-ago EPS of $0.01, on sales of $2.03 billion, up 66.4%.

Snowflake stock trades at 299.0 times expected 2024 earnings of $0.46 and 139.4 times estimated 2025 earnings of $1.00 per share. The stock’s 52-week range is $126.01 to $405.00. The company does not pay a dividend, and the total shareholder return for the past year was negative 39.4%.

Splunk

Shares of real-time data collection and reporting platform Splunk Inc. (NASDAQ: SPLK) have dropped about 16.8% over the past 12 months. New CEO Gary Steele arrived on the scene in mid-April with a remit to lead the company’s growth. A report that Cisco was considering an acquisition of Splunk gave the stock a boost in February, but when the rumor failed to pan out, shares dipped again.

Analysts are bullish on the stock, with 24 of 39 giving Splunk a Buy or Strong Buy rating and the rest rating the shares at Hold. At a price of around $98.90 a share, the upside potential based on a median price target of $151.00 is 52.7%. At the high price target of $225.00, the upside potential is nearly 128%.


For the first quarter of fiscal 2023, which ended in April, Splunk is expected to post revenue of $629.73 million, down 30.1% sequentially, but 25.4% higher year over year. The estimated adjusted loss per share is $0.75, much worse than the prior quarter’s profit of $0.66 per share but below the year-ago loss per share of $0.91. For the full fiscal year, Splunk is expected to report a loss per share of $0.09, compared to last year’s loss of $1.25 per share, on sales of $3.28 billion, up 22.6%.

Splunk stock trades at 100.1 times expected 2024 earnings of $0.89 and 42.6 times estimated 2025 earnings of $2.31 per share. The stock’s 52-week range is $84.63 to $176.66. The company does not pay a dividend, and the total shareholder return for the past year was negative 16.2%.

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