On Thursday, Snowflake (NYSE:SNOW) shares were down about 5 per cent in pre-open after the data software firm offered a softer-than-expected outlook.

Reportedly, Snowflake posted an EPS (Earnings per share) of USD 0.11 on revenue of USD 557 million, beating the average analyst consensus of earnings of USD 0.04 on revenue of USD 539.07M. Revenue grew 67 per cent year-over-year (YoY), while the net revenue retention rate stood at 165 per cent, down from 173 per cent YoY.

For this quarter, Snowflake sees product revenue in the range of USD 535-540M, missing the USD 551.8M consensus and causing shares to fall. For FY2023, the company sees product revenue at USD 1.92B, in line with estimates. The company did raise its full-year adjusted operating margin outlook to 3 per cent from the prior 2 per cent.

Raymond James analysts also cut the price target – to USD 180 from USD 197 per share. Still, they remain upbeat on Snowflake stock due to the reasons outlined below. Morgan Stanley analysts cut the price target to USD 225 per share from the previous USD 248 to reflect below-consensus fourth-quarter guidance.