Snowflake Earnings Preview—Uncertainty is Rampant

After rallying, the company’s stock had six straight days when it closed lower than it opened

• Snowflake will report quarterly earnings on Wednesday after the market closes.
• The stock price has sold off over $25 ahead of the announcement.
• The company is expected to report earnings-per-share of $0.18 on $955.52 million in revenue.
  

Snowflake (SNOW) reports earnings this week, and uncertainty is rampant with a high implied volatility and large stock price move expected. After rallying over $40 in one day after the previous earnings call, the company’s stock has fallen from the recent high of $194.40 with six consecutive days when it closed lower than it opened. The stock currently sits around $170 per share.

Snowflake is expected to report an earnings-per-share (EPS) of $0.18 on $955.52 million in revenue.

The chart above tells the story for Snowflake: plenty of realized volatility with so much change happening in the tech business. Snowflake is an American, cloud-based data storage company that has operating partnerships with Amazon (AMZN), Microsoft (MSFT) and Alphabet (GOOGL) to name just a few.

With over 10,000 customers, and 6 billion data queries a day on average, the company is certainly a leader in the cloud data space.

In the last earnings call CEO Sridhar Ramaswamy was upbeat about the company’s future: “Snowflake delivered a strong third quarter, with product revenue of $900 million, up 29% year-over-year, and remaining performance obligations of $5.7 billion, with year-over-year growth accelerating to 55% ...

Our obsessive drive to produce product cohesion and ease of use has built Snowflake into the easiest and most cost-effective enterprise data platform. That is what’s leading us to win new logo after new logo, expand within our customer base, and displace our competition over and over again.”

In 2020, Snowflake was a pandemic darling with a stock price that shot as high as $429 per share. It’s come down quite a bit since then, but we did saw a massive increase after the last earnings call in November 2024 when the stock shot from $130 to $170 overnight.

SNOW stock exhibits large swings, and that may be the reason for the high implied volatility ahead of the earnings announcement on Wednesday.

Looking at the implied volatility of the options market helps us put context around the expected stock price move for certain binary events. We can look at the weekly options expected move relative to the stock price and even compare the weekly expiration to further-dated expirations for context.

For this week, SNOW stock has an expected move of +/- $19.50 against the current price of $170 per share. This is over 10% of the notional value of the stock price, which puts Snowflake earnings on the map as most companies land between 5%-10% of the stock price.

Looking to June of this year, we see an implied stock price move of +/- $38.01, which is less than twice the expected move of this week. In other words, the earnings report on Wednesday makes up over 50% of the expected stock price range for the next 116 days. That's huge!

Snowflake has had a strong earnings history the past two quarters, exceeding both EPS and revenue estimates. We will see in a few days if they can make it a three-peat.

Bullish on SNOW stock for earnings

If you're bullish on SNOW stock for earnings, you're looking for the three-peat in exceeding EPS and revenue estimates. If they can paint an optimistic picture for 2025, we could see the recent stock price sell-off reverse on Wednesday after the close.

Bearish on SNOW stock for earnings

If you're bearish on SNOW stock for earnings, you're not taking the six consecutive selloff days lightly. When implied volatility is really high for an earnings announcement, it means there's less clarity around what is expected from the company. In this case, if there is any misstep or an earnings miss, we could see the stock price continue to fall on Wednesday.

Tune in to Options Trading Concepts Live at 11 a.m. CST on Wednesday for an in-depth options trading strategy overview for Snowflake (SNOW), Salesforce (CRM) and NVIDIA (NVDA) earnings after the close.

Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb  

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