Sam Boughedda

Investing.com — Shares of Snowflake Inc (NYSE:) rallied 7.3% on Monday after Wolfe Research analyst Allan Verkhovski initiated coverage on the stock with an outperform rating and $250 price target.

Verkhovski stated in a note to investors, that they were excited by the possibility of meaningful revenue outperformance. They have built a waterfall model which calls for 50% growth for CY24.

Analyst: “We believe that SNOW has the potential to be the fourth hyperscaler, growing at a faster rate than AWS and with the most capable management team,” he wrote.

Verkhovski also cited his company’s cash flow model free of charge as an important reason they are positive about the stock.

Wolfe Research analysts stated that they have worked hard to create a model with real FCF upside. They believe investors can be happy with 22%/24% FCF margins in CY23/CY24, with FCF growing by 60% Y/Y in the CY24.

He said, “For people looking for “top-grade”, software portfolios we believe that this asset is SNOW, and it is time.