Should You Buy, Sell, or Hold SNOW Stock Before Q4 Earnings Release?

Snowflake SNOW is set to release fourth-quarter fiscal 2026 results on Feb. 25.

The Zacks Consensus Estimate for fourth-quarter fiscal 2026 earnings has remained steady at 27 cents per share over the past 30 days, indicating a year-over-year decline of 10%. The consensus mark for fourth-quarter revenues is pegged at $1.25 billion, indicating an increase of 26.85% from the year-ago quarter’s reported figure.

The Zacks Consensus Estimate for fiscal 2026 earnings has remained steady at $1.20 per share over the past 30 days, indicating year-over-year growth of 44.58%. The consensus mark for fiscal 2026 revenues is pegged at $4.65 billion, indicating an increase of 28.20% from the year-ago quarter’s reported figure.

SNOW’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, with the average earnings surprise being 33.27%. 

Snowflake Inc. Price and EPS Surprise

Snowflake Inc. price-eps-surprise | Snowflake Inc. Quote

Let’s see how things have shaped up for SNOW prior to this announcement:

Factors to Note for SNOW’s Q4

Snowflake’s fiscal fourth-quarter performance is expected to have reflected an expanding clientele driven by strong AI capabilities and a rich partner base. 

Snowflake continues to benefit from strong adoption and increasing usage of its platform, as reflected in a net revenue retention rate of 125% at the third quarter of fiscal 2026-end. The company reported 19% year-over-year growth in the number of customers, reaching 12,062 in the reported quarter. SNOW reported 20% year-over-year growth in the number of customers, reaching 12,621 in the fiscal third quarter of 2026. The company now has 688 customers with trailing 12-month product revenues exceeding $1 million (up 29% year over year) and 766 Forbes Global 2,000 customers. This trend is expected to have continued in the to-be-reported quarter as well.

Expanding clientele is expected to have benefited the top-line growth. For the fourth quarter of fiscal 2026, Snowflake expects product revenues in the range of $1.195-$1.2 billion. The projection range indicates year-over-year growth of 27%. The Zacks Consensus Estimate for fiscal fourth-quarter 2025 product revenues is pegged at $1.19 billion, indicating 26.93% growth from the figure reported in the year-ago quarter.

The Zacks Consensus Estimate for customers with trailing 12-month product revenues greater than $1 million is currently pegged at 729, suggesting a 25.68% increase from the figure reported in the year-ago quarter. The consensus mark for total customers is pegged at 13,106, indicating an increase of 485 net new customers in the to-be-reported quarter.

SNOW Shares Underperform Sector

Snowflake shares have plunged 11.3% in the trailing six-month period against the Zacks Computer & Technology sector’s increase of 10.7%. The company’s shares have outperformed the Zacks Internet Software industry’s decline of 20.7% over the same time frame.

SNOW Stock’s Performance

SNOW Stock Is Currently Overvalued

Snowflake stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.

In terms of forward 12-month Price/Sales, SNOW is trading at 10.19X, higher than the Internet Software industry’s 3.93X.

Valuation: SNOW Is Trading at a Premium

Snowflake Rides on Strong Portfolio

Snowflake benefits from its role in the enterprise AI revolution, with strong adoption of its AI capabilities, such as Snowflake Intelligence and Cortex AI, driving customer growth. In the third quarter of fiscal 2026, the company announced that more than 7,300 customers are using Snowflake’s AI and ML technology weekly. 

Snowflake’s focus on AI has been a key catalyst, with AI influencing 50% of bookings signed during the fiscal third quarter. The company achieved a $100 million AI revenue run rate one quarter earlier than expected, reflecting strong enterprise adoption of its AI capabilities.

SNOW’s expanding portfolio has been noteworthy. The company recently announced new enterprise AI capabilities, including Semantic View Autopilot, ML and notebook upgrades, agent evaluation tools, and expanded AI cost governance to deliver more trusted, scalable and efficient AI on Snowflake.

Rich Partner Base Expands SNOW’s Clientele

SNOW’s strong partner base, which includes major players like Alphabet GOOGL, NVIDIA NVDA, SAP SAP, Amazon’s cloud computing platform Amazon Web Services (AWS), Meta Platform, ServiceNow, Fiserv, EY, LTMindtree, Next Pathway, and S&P Global, has been a significant growth driver of its success.

Snowflake’s expanding partnership with cloud computing platform Google Cloud has been noteworthy. In January 2026, Snowflake expanded its partnership with Alphabet’s Google Cloud to improve product integration and market strategy. This integration brings Alphabet’s Google Cloud Gemini 3 models directly into Snowflake Cortex AI. Enterprises can build and scale generative AI applications securely and with governed data, without data movement. The partnership also includes global expansion, marketplace co-selling, and infrastructure upgrades that enhance price and performance on Alphabet’s Google Cloud.

In November 2025, Snowflake announced a native integration with NVIDIA. This integration with NVIDIA brings GPU-accelerated CUDA-X DS libraries into Snowflake ML. It enables significant speed improvements for data science workflows without requiring any changes to the code.

In November 2025, Snowflake announced a new collaboration with SAP to integrate Snowflake’s AI Data Cloud with SAP Business Data Cloud, enabling seamless, zero-copy access to semantically rich enterprise data for advanced AI, analytics, and intelligent application development.

Conclusion

Despite SNOW’s robust portfolio, challenging macroeconomic uncertainties, rising AI costs, and stiff competition from hyperscale cloud providers remain headwinds. The stretched valuation also makes the stock risky right now.

Snowflake currently carries a Zacks Rank #3 (Hold), which implies that investors should wait for a favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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