Snowflake Q3 results expected to show long-term strength, but slow going for now
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Snowflake (NYSE:SNOW) is slated to report third-quarter results on November 30 at a time when the data warehousing company has continued to benefit from the long-term push to the cloud.
However, investment firm Monness, Crespi, Hardt said there are concerns that Snowflake's (SNOW) growth is slowing.
Analyst Brian White, who has a neutral rating on Snowflake (SNOW), noted that the Frank Slootman-led company has seen its margins come down, and with a "rich" valuation, dynamic competition and continued weakness in the global economy, there are several near-term issues Snowflake (SNOW) will have to maneuver. 
"Aside from any upside resulting from near-term guidance brinksmanship, we believe the trajectory of growth is on the ropes," White wrote in a note, adding that the "troublesome" earnings reports from big tech companies showed "more challenging times ahead for the economy." 
White also said that Snowflake's (SNOW) largest competitors in the cloud, Amazon (AMZN) AWS and Microsoft (MSFT) Azure, have painted a "darker picture" for both the public cloud and the software space as a whole, and "especially" for companies that are tied to usage-based revenue models, as Snowflake (SNOW) is.
As such, White expects Snowflake (SNOW) could generate 71% year-over-year growth in the third-quarter, with revenue coming in at $573.5M. But concerns over the fourth-quarter of the company's 2023 fiscal year have emerged. White noted that he expects Snowflake (SNOW) to generate 73% revenue growth in the period, with sales coming in at $663.7M, but Wall Street is well below that, with a consensus forecast of $585.9M in revenue.
"In our view, Street estimates for [the fourth-quarter] appear very conservative, even in a weakening economic environment," White explained.
For its 2023 fiscal year, Snowflake (SNOW) expects product revenue of $1.905B to $1.915B, with product gross margins of 75%, a 2% operating margin and an adjusted free cash flow margin of 17%. 
Last month, investment firm Bernstein started coverage on Snowflake (SNOW), noting that although the company has seen strong growth, it may be difficult to take away business from the entrenched cloud competitors.