Analysts at Bank of America acknowledged that Snowflake ( SNOW ) could be adversely affected by a cyber threat that affected customer accounts. Despite these concerns, analysts maintain a neutral rating on the stock and have set a $200 price target.
“On May 23, 2024, Snowflake discovered unauthorized access to some of its customer accounts,” Bank of America said in a report. Snowflake, in partnership with Google Mandiant, is leading the investigation into the breach, which allegedly compromised the information of 165 organizations.
Analysts predict that the security breach could lead to temporary interruptions in data transmission and could slow the pace of new customer sign-ups as these companies assess the seriousness of the security issue.
In the second quarter, there may be a decrease in revenue due to Snowflake’s usage-based pricing model. However, the company downplayed the significance of this decline, stating that the breach was not caused by a network intrusion.
The analysis also notes the possibility of Snowflake’s chargeback in the second quarter due to unauthorized data access by cybercriminals. However, Bank of America says Snowflake determined that the compromised accounts did not have multi-factor authentication enabled, which made it easier for attackers to log in credentials, access accounts and remove customer data, rather than exploit a flaw in Snowflake’s system. .
Looking ahead, the company suggests that the problem can be mitigated by implementing more stringent security measures with Snowflake and its customers. Snowflake is said to have made multi-factor authentication mandatory for risky accounts. Despite potential customer dissatisfaction with this event, analysts express confidence in Snowflake’s ability to strengthen security measures.
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