Cloud-based data warehouse company Snowflake Inc SNOW reported a narrower loss and 119% revenue growth for its third quarter. Following the impressive headline numbers, the stock is moving to the upside.

Credit Suisse analyst Brad Zelnick maintained a Neutral rating on Snowflake's and raised the price target from $250 to $265.

Piper Sandler analyst Bent Bracelin maintained an Overweight rating and raised the price target from $264 to $312.

Continues To Execute: Snowflake reported a healthy first quarter as a public company, overachieving relative to Street expectations, Zelnick said.

The demand environment remained strong, as evidenced by an 11.7% sequential and a 9.6% year-over-year increase in net new customer adds. Gross margin, the analyst said, benefited from renegotiated deals with Amazon.com, Inc.'s AMZN AWS and Microsoft Corporation MSFT, as well as increasing average price per credit.

On guidance, the analyst said, the fourth-quarter product outlook was weaker at $164.5 million relative to the Street estimate of $166.1 million. Net retention rebounded to over 160% and is expected to remain in the range for the foreseeable future.

"The company continues to execute on the longer term opportunity, with little to no impact from COVID," Zelnick wrote in the note,
Snowflake's premium valuation at 91 times enterprise value/calendar year 2021 revenue estimate, keeps Credit Suisse on the sidelines.

Confident In Longer-Term Growth Trajectory: Snowflake's quarter was impressive, according to Bracelin. Product revenues, which grew 115% year-over-year to $148 million, contributed to much of the revenue upside, as consumption trends remained strong at existing customers.

The operating loss narrowed, thanks to lower-than-expected headcount costs.

"Fortune 500 customers grew 56% y/ym rising to 165 out 500, with 33% of the Fortune 500 now as customers," the analyst wrote in the note.

Piper Sandler raised revenue estimates by $17 million for 2020 and $8 million for 2021. The firm has increased confidence in the longer-term growth trajectory on robust multi-year contract signings in the third quarter.

"We remain bullish on SNOW based on a promising 5-8 year growth trajectory and would opportunistically add to positions on weakness," Bracelin added.

SNOW Price Target: Snowflake shares were advancing 14.5% to $335.19 at publication time.