$SNOW Canaccord Genuity Upgrades to Buy

“If we take management’s C2028/F2029 targets at face value ($10B in product revenue and 25% FCF margins), then SNOW shares are too cheap. Here’s the simple math: 35x C2028 FCF of $2.5B gets you an enterprise value of $87.5B in 4 years from now (assuming we’ll be looking at C2028 estimates in mid-2026). If we give SNOW credit for about $5B in net cash at that time and assume roughly 385M shares outstanding, that gives us a roughly $240 stock in 4 years, which is better than a 20% annual return from here (note 35x EV/FCF checks out to less than 9x EV/R, so these are not heroic valuation assumptions). What’s more, if our experience with this team is anything like it was during their tenure at ServiceNow, it’s quite likely that these targets are achieved as much as a year early, which would only amplify the returns. So we’re using the market-driven pullback to get more constructive on one of the highest quality names that we cover. It might not be perfectly linear from here, but we’re quite confident that SNOW will be worth more in the years ahead. We’re upgrading SNOW to BUY from Hold and reiterating our $185 price target."