A securities class action lawsuit has been filed against Snowflake Inc. (NYSE: SNOW), alleging the data-cloud company made misleading statements and failed to disclose significant headwinds that would impact its revenue growth.
The lawsuit, announced by law firms including Bernstein Liebhard LLP and Robbins Geller Rudman & Dowd LLP, represents purchasers of Snowflake Class A common stock from June 27, 2023, to February 28, 2024. The complaint alleges that Snowflake concealed that "product efficiency gains, Iceberg Tables, and tiered storage pricing were expected to have a material negative impact on consumption and revenues."
According to the filing, these headwinds jeopardized Snowflake's ability to achieve its long-term guidance of reaching $10 billion in product revenue by fiscal year 2029. On February 28, 2024, Snowflake disclosed these issues when it announced its financial results, forecasting slower revenue growth. The news caused the company's stock price to fall more than 18 percent in a single day.
The lawsuit seeks to recover damages for investors who suffered losses during the class period. Investors who wish to serve as lead plaintiff have until April 27, 2026, to file with the court. A lead plaintiff acts on behalf of all other class members in directing the litigation.
The legal action introduces a new layer of uncertainty for Snowflake, which has been grappling with investor concerns over a slowdown in its high-growth trajectory. The outcome of the lawsuit will be closely watched, with the next major step being the court's decision on class certification.
This article is for informational purposes only and does not constitute investment advice.
