Key Stats for Snowflake Stock
- Current Price: $328.12
- Target Price (Mid): ~$867
- Street Target: ~$424
- Potential Total Return: ~164%
- Annualized IRR: ~25% / year
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What Happened?
Snowflake (SNOW) closed down 2.33% at $328.12 on September 28 after announcing plans to raise $3.5 billion in convertible notes. StockStory tied its premarket slide of more than 4% to dilution concerns over the offering.
The Nasdaq Composite fell 0.92% that day as the 10-year Treasury yield reached 5.25%, its highest level since 2007, and Snowflake fell about 2.5 times as far.
Early on September 29, Snowflake announced it had priced an upsized $3.75 billion at a 0.00% coupon, with an option for $550 million more. Skipping interest still carries a bill: a $383.5 million dilution hedge, $3.75 billion due if the notes never convert, and cash or new shares if the stock climbs far enough.
A $383.5 Million Hedge Aims to Push Dilution Out to $820
The new 2029 notes carry an initial conversion price of about $500.38, and the 2031 notes about $483.98, premiums of 52.5% and 47.5% to the September 28 close. Both sit above the Street’s mean price target of around $424 and median of $440, though the notes run until 2029 and 2031. These are deal terms, not a price forecast.
Based on the stated conversion rates, full share settlement would mean about 7.6 million shares, roughly 2% of the 352.46 million outstanding. The capped calls are designed to offset that dilution up to $820.30 a share, 150% above the September 28 close. Above the cap, only the gain beyond $820.30 turns into new shares.
Its September 2024 notes show what happens past a cap. Their capped calls top out at $225 per its July-quarter 10-Q, and Snowflake’s non-GAAP diluted share guidance for fiscal 2027 already includes about 10 million shares from those notes, net of the capped calls. Snowflake expects to pay about $548.3 million to retire roughly $261.8 million of the 2027 notes, with the rest available for uses that may include buybacks or acquisitions.
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Robins’ Guidance Haircut, and Why It May Shrink
At the Piper Sandler Growth Frontiers Conference on September 15, CFO Brian Robins explained how Snowflake sets guidance. The company reruns machine-learning forecasts nightly, then discounts early data on new products such as CoCo, its AI coding agent.
“And with just a short amount of data with sort of high numbers, I think it would somewhat be reckless to extract that out and just apply that to guidance,” Robins said. “And so we take that number and apply a haircut to that, and then that’s sort of what comes up with the number.”
TIKR data shows Snowflake beat consensus revenue estimates in each of the five quarters through July 2026. The two most recent beats, 5.13% and 4.43%, came as CoCo scaled and ran about twice the 2.44% and 2.31% of the two quarters before. With two quarters of data, Robins said, “we’re getting closer to what that number is,” so that cushion could shrink.
He also said the majority of Snowflake’s contracts renew in the fourth quarter, though he said he had no concerns about it.
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TIKR Advanced Model Analysis
- Current Price: $328.12
- Target Price (Mid): ~$867
- Potential Total Return: ~164%
- Annualized IRR: ~25% / year
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The TIKR model’s mid case projects Snowflake at around $867 by January 31, 2031, about 164% above $328.12, or roughly 25% a year over 4.3 years. It is a scenario, not a forecast.
The revenue path rests on AI product consumption and faster migrations; Robins said agents and skills have cut migration time from about 10 or 11 months to around 6. The margin driver is operating leverage: TIKR data shows non-GAAP operating margin rose to 15.32% in the July 2026 quarter from 11.14% a year earlier.
The primary risk is consumption: Snowflake’s own filings flag customers optimizing usage, including on AI features. On the upside, the mid-case target sits above the $820.30 cap, where the 2031 notes, still outstanding then, would dilute only on the gain beyond it. On the downside, consensus fiscal 2028 revenue has already risen about 6% since June 30, so smaller beats could reverse those revisions.
Conclusion
Third-party calendars list December 2, after the close, for Snowflake’s fiscal third-quarter report; the confirmed date will be posted in its investor relations materials. Consensus expects third-quarter revenue of around $1.65 billion. A beat near the April and July 2026 quarters’ pace would show the haircut still leaves room; one near the pace of the two quarters before would suggest that cushion is closing.
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Should You Invest in Snowflake?
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Pull up Snowflake, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
