Snowflake SNOW shares have gained 11.7% since the company reported its first-quarter fiscal 2026 results on May 21. The upside was driven by strong adoption and increasing usage of its platform, as reflected by a net revenue retention rate of 124% as of April 30, 2025. The number of customers that contributed more than $1 million in the trailing 12-month product revenue increased from 485 as of April 30, 2024, to 606 as of April 30, 2025.
The company’s shares have soared 29.5% in the year-to-date period, outperforming the Zacks Computer and Technology sector’s decrease of 3.8% and the Zacks Internet Software industry’s increase of 4.3%. The outperformance in SNOW stock is driven by its strong portfolio and an expanding partner base. SNOW had 11,578 customers, increasing from 9,741 customers as of April 30, 2024. In the first quarter of fiscal 2026, SNOW also added 451 net new customers, representing a 19% increase year over year.
YTD Performance
Image Source: Zacks Investment Research
However, Snowflake shares are currently overvalued, as suggested by its Value Score of F.
The SNOW stock is trading at a premium with a forward 12-month Price/Sales of 13.9X compared with the Internet Software industry’s 5.33X.
Price/Sales (F12M)
Image Source: Zacks Investment Research
At such a high valuation, the question that arises is whether the SNOW stock is still a worthy investment. Let us dig deep to find out.
SNOW’s Expanding AI Partnerships Drive Growth
SNOW’s strong partner base, which includes major players like Microsoft MSFT, Amazon, NVIDIA NVDA, Meta Platform META, ServiceNow, Fiserv, EY, LTMindtree, Next Pathway and S&P Global, has been a major growth driver of its success.
Read the full article on Yahoo Finance here:
https://finance.yahoo.com/news/snowflake-rallies-post-q1-earnings-172800284.html
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