Snowflake Divides Analysts’ Opinions With a Wide Range of Ratings

2020’s hottest IPO has divided opinions with a wide range of ratings from Wall Street’s big names.

Oct. 12, 2020

It’s been a busy morning on Wall Street with a number of big names initiating coverage on Snowflake. The data warehousing company made a big splash on the public markets last month with the biggest software IPO ever and the mania that surrounded the listing will stay in people’s memories for a long time.

The company originally intended to go public in the $75 – $85 range before a wave of interest, thanks in no small part to big investments from Berkshire Hathaway and Salesforce in the lead up to its IPO, led the company to price its shares at $120 for its public debut. This was only the beginning though as both institutional and retail investors alike had a field day. The stock began trading at $245, reaching an intra-day peak of over $300, before closing at $254. This gave the company a valuation of $70 billion. Back in February, Snowflake had a private valuation of $12.4 billion. 

After an IPO like that, it would be natural for Snowflake’s stock price to subside after the initial mania has faded. The stock fell 14% in its first week after going public, but since then it has seen a resurgence of about 10% to trade at around $240 per share, indicating that the interest for the cloud-based data warehouse business has remained steady. 

Analysts’ Ratings for Snowflake

With all this furor surrounding Snowflake, it’s no surprise that the big banks and investment firms are keeping a close eye on it, with a number of them initiating coverage today. What is very interesting to see is the divergence in opinions of the ‘smart money’. Here’s a rundown of some analysts’ ratings for Snowflake: 

  • Truist sets a buy rating and a price target of $350.
  • Oppenheimer sets an outperform rating and a price target of $300. 
  • JP Morgan Securities sets a market outperform rating and a price target of $285. 
  • Goldman Sachs sets a buy rating and a price target of $268. 
  • Piper Sandler sets an overweight rating and a price target of $264. 
  • Barclays sets an equal weight rating and a price target of $256. 
  • Credit Suisse sets a neutral rating and a price target of $250.
  • Morgan Stanley sets an equal weight rating and a price target of $220. 

While it may hold the record for the biggest software IPO ever, it remains a polarizing stock in many people’s eyes, with the bull case focused on the growth story and the long-term potential, while those of a bearish persuasion will be steering well clear of such a lofty valuation. I’m excited to see it continue to divide opinions on Wall Street for the months and years to come.

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