---
title: "Analysis of SNOW before the earnings report, can only say AI is too hot"
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/41190874.md"
description: "Pre-earnings analysis [Comprehensive Rating]: Recommended (Overweight, leaning towards a combination of "distress reversal + expectation gap realization") [Core Argument] Earnings have beaten estimates for 2 consecutive quarters + raised guidance, achieving both FY27 full-year +27% growth / 25% non-GAAP op margin and the "Rule of 52", which is characteristic of a top-tier SaaS financial model; RPO +42% provides 4 quarters of visibility..."
datetime: "2026-05-28T02:27:48.000Z"
locales:
  - [en](https://longbridge.com/en/topics/41190874.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/41190874.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/41190874.md)
author: "[宇宙大爆炸](https://longbridge.com/en/profiles/636902.md)"
---

# Analysis of SNOW before the earnings report, can only say AI is too hot

# Pre-Earnings Analysis

**【Overall Rating】:** Overweight (tending towards a combination of "troubled reversal + expectation gap realization")

**【Core Arguments】**

1.  Earnings have beaten estimates and raised guidance for 2 consecutive quarters. Achieving FY27 full-year +27% growth / 25% non-GAAP op margin simultaneously fulfills the "Rule of 52",  
    placing it among top-tier SaaS financial models; RPO +42% provides 4-quarter visibility.
2.  The bear-led narrative (Databricks encroachment + high valuation) has been refuted by hard metrics like NRR / large customer growth rate,  
    but the stock price remains in the lower 25th percentile of the 52-week range → a narrative-reality expectation gap exists.
3.  The AI product cycle (Cortex / Snowflake Intelligence) has begun to be disclosed in terms of actual usage accounts,  
    serving as a potential monetizable catalyst for the next 2–3 quarters.

**【Buy Trigger Conditions】**

-   Price Range: It is advisable to build positions in batches within the $160–180 range (current $175.72 is near the midpoint, risk/reward is reasonable).
-   Catalyst: FY27 Q1 earnings (expected to be announced late May - early June 2026). If it beats estimates again and maintains/raises the FY27 full-year guide,  
    target price could reach $220–240 (corresponding to Fwd P/S ~14–15x, returning to the 5-year median).

**【Risk Points & Stop-Loss】**

-   Recommended Stop-Loss: Below $135 (close to the 52-week low of $118 + the April rebound starting point), meaning the bear narrative is confirmed by new data.
-   Key Risks: (a) Databricks IPO valuation anchoring effect; (b) Rising GPU costs pushing product gross margin below 73%;  
    (c) SBC as a percentage of revenue failing to improve significantly in FY27 (still \>30%).

**【Recommended Position & Time Window】**

-   Position Size: 5–8% of the tech SaaS sector allocation as the single-stock exposure limit.
-   Time Window: 6–12 months, aligned with the FY27 Q1–Q3 earnings cycle.

**【3 Key Metrics Requiring Continuous Tracking】**

1.  **RPO YoY Growth Rate**: Whether it can maintain 35%+ (determines FY28 revenue visibility).
2.  **NRR**: Whether it can hold above 125% (determines the validity of the market share narrative).
3.  **Snowflake Intelligence / Cortex User Count & AI-Related Revenue Disclosure**: Whether it can be independently quantified in FY27 earnings reports.

# Post-Earnings Analysis

**The previous rating (Overweight) needs to be revised upwards.** All three tracked metrics hit positive targets, and:

-   FY27 full-year guidance was raised by +$180M (+3.2%) in one go, with op margin +100bp, implying **"Rule of 52 → approaching Rule of 55"** (31% revenue growth + 23% FCF margin + 13.5% op margin), entering the financial model of a very select few top-tier SaaS companies.
-   Quarterly product revenue achieved the "largest sequential dollar increase in company history" (CEO's words), driven by both the core platform and AI.

**【Updated Tracking Metrics List (Replacing the original 3)】**

1.  **Current RPO Proportion / Proportion of Revenue Recognizable within 12 Months** (replacing simple RPO growth): To judge if there is room for a second upward revision of the FY27 full-year guide.
2.  **"Daily/Weekly Active User" Penetration Rate for AI Product Accounts** (Snowflake Intelligence, Cortex Code, Cortex Agents): A baseline has been established for the first time. Next quarter, watch if the ~5,000 / 7,100 accounts can continue to double.
3.  **Slope of Non-GAAP Operating Margin Expansion**: From 11.9% in Q1 to the full-year guide of 13.5%, implying an average of ~14% needs to be achieved in Q2–Q4. Need to track if SBC as a percentage of revenue can drop from ~38% in FY26 to below 30% in FY27.
4.  **New Addition**: **Natoma Acquisition Integration Progress + MCP Niche** — AI Agent is the biggest narrative for FY27–FY28. This acquisition positions SNOW as the "control plane" for Agentic Enterprise. Need to observe if quantifiable agent workload revenue materializes.
5.  **New Addition**: \*\* Quarterly New $1M+ Large Customer Count \*\* (46 this quarter vs. 26 last year) — This is a more sensitive sales acceleration indicator than "Total $1M+ Customer Count".

**【Position & Price Recommendation Update】**

-   Previous Stop-Loss $135 / Accumulation Range $160–180: Post-earnings, **the accumulation range is revised up to $180–200** (already up after-hours), with the target price revised up to **$240–260** (corresponding to Fwd P/S ~14–15x, based on the revised FY27 $5.84B).
-   **If the after-hours stock price jumps \>15%**: It's advisable to wait for a pullback to the 5-day moving average before adding, avoiding chasing at emotional highs.
-   **If the market unusually offers a pullback** (e.g., dragged down by macro volatility to below $170): It would be a higher-risk-reward accumulation window.

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