The initial response to Snowflake’s (NYSE:SNOW) third-quarter results yesterday was disappointment and a lower share price. However, SNOW stock is now moving back up as financial traders mull over the data. Given time to reflect, investors seem to realize that the company’s quarterly results aren’t so bad, even beating Wall Street’s expectations.
Snowflake is a software company that provides a cloud data platform. The tech wreck of 2022 didn’t spare Snowflake, as inflation and interest rate hikes have made it challenging for software businesses to turn a profit.
Thus, Snowflake’s Q3 fiscal 2023 report had the potential to be make-or-break for the company. Results beat the Street, though, as the company’s quarterly revenue of $557 million exceeded the consensus projection of $539 million. Furthermore, Snowflake reported quarterly adjusted EPS of 11 cents. That figure handily beat the analyst consensus estimate of 4 cents.
What’s Happening With SNOW Stock?
After Snowflake released its quarterly results yesterday, SNOW stock wobbled and fell into the red. This might have been due to the market’s disappointment over the company not demonstrating an increasing pace of revenue growth.
In the previously reported quarter, Snowflake grew its revenue year-over-year (YOY) by 83%. This time around, though, revenue increased 67% YOY. That’s still quite impressive, but sometimes the financial community has very high expectations.
Again, 67% revenue growth is nothing to sneeze at, as Snowflake also had to deal with high inflation and interest rate increases. As a result, it seems that traders have changed their minds about the result today, bidding up shares.
As of this writing, SNOW stock is up 4% for the day and approaching the crucial $150 resistance level. Bear in mind, shares have also lost more than 50% of their value year-to-date (YTD).
Just maybe, yesterday’s earnings report signaled the start of a major turnaround for Snowflake and SNOW shareholders. It just goes to show that initial reactions to data releases can be “wrong.” The market often needs more time to consider the bigger picture.
On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.