company background image
SNOW

Snowflake NYSE:SNOW Stock Report

Last Price

US$172.13

Market Cap

US$55.1b

7D

-6.8%

1Y

-45.6%

Updated

24 Sep, 2022

Data

Company Financials +
SNOW fundamental analysis
Snowflake Score
Valuation2/6
Future Growth2/6
Past Performance0/6
Financial Health6/6
Dividends0/6

SNOW Stock Overview

Snowflake Inc. provides a cloud-based data platform in the United States and internationally.

Snowflake Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Snowflake
Historical stock prices
Current Share PriceUS$172.13
52 Week HighUS$405.00
52 Week LowUS$110.27
Beta1.05
1 Month Change-12.30%
3 Month Change13.60%
1 Year Change-45.61%
3 Year Changen/a
5 Year Changen/a
Change since IPO-32.21%

Recent News & Updates

Sep 25

Snowflake: Valuation Is Still Too High Going Into A Likely Recession

Summary Snowflake is making massive moves to build its clout with data sharing, predicated on an expanded CY26 TAM of $248B. It has also been making solid progress in H1, despite weakness seen in enterprise cloud spending by other leading cloud computing players. Therefore, SNOW has outperformed the broad market recently, highlighting its execution prowess in a challenging macro environment. We discuss why we believe it's still better to continue watching the action from the sidelines for now. Thesis Snowflake Inc. (SNOW) stock has continued to outperform the broad market since our pre-earnings update in July, urging investors to consider less expensive high-growth stocks. Despite suffering a massive battering from its 2021 highs, SNOW's NTM revenue multiple of 20x is still well ahead of its high-growth peer set of average of 8x. Notwithstanding, the company's expanded CY26 TAM of $248B has spurred SNOW bulls, as it pursues its opportunity as a cloud data platform. Furthermore, a solid FQ2'23 earnings release corroborated the resilience of its usage-based pricing model. Snowflake demonstrated that it has continued to observe robust growth in its underlying growth drivers, despite worsening macro headwinds. Despite its recent market outperformance, SNOW has fallen nearly 17% from its August highs. Therefore, we believe some investors could wonder whether the current pullback represents an appropriate opportunity to add exposure. Our analysis indicates that Snowflake's underlying growth deceleration could have bottomed out in Q2. Therefore, if Snowflake can execute well moving ahead, we posit that its June lows should sustain resiliently. Notwithstanding, we assessed that SNOW's marked recovery from its June bottom has likely been reflected at the current levels. We believe the market had anticipated a robust Q2 release, which led to a post-earnings spike toward its August highs. However, its momentum surge also led to a price top in August, with SNOW giving back nearly 50% of its post-earnings surge. We believe the market has justifiably de-rated SNOW and is unlikely to re-rate it much higher in the medium-term from the current levels. Hence, we don't find the reward-to-risk profile at the current levels attractive to revise our rating. As such, we reiterate our Hold rating on SNOW and urge investors to wait patiently for its bottoming process to transpire. Snowflake Wants To Consolidate Its Clout With Data Sharing Snowflake's competitive edge as the leading multi-cloud data platform has helped sustain its rapid revenue growth rates. Furthermore, its data-sharing progress has strengthened its position with its customers, given the regulatory landscape requiring tighter privacy and data governance controls. Consequently, Snowflake's cloud-native architecture is well-primed to leverage the data-sharing momentum, driven by its customers' needs to unlock deeper customer insights without infringing on data privacy regulations. Therefore, Snowflake's competitive moat could be strengthened if more companies depend on it for their data-sharing practices. Snowflake is also confident that it would drive further platform loyalty and usage, as CFO Mike Scarpelli accentuated: [Customers] first need to get all their data in Snowflake and whoever they're sharing their data with needs to be Snowflake on the other end. 21% of our customers are using data sharing today, and that continues to grow every quarter. That really creates the stickiness because once you start using Snowflake for data sharing, you can't get off of data sharing. Once you get into that network effect, whoever that supplier or vendor or whatever customers need to be on Snowflake. (Piper Sandler Growth Frontiers Conference) We believe Snowflake's commentary is credible. The company wants to be the critical driver for its customers' data, leveraging the capability of its cloud data platform. Notably, it's also expanding into app development moving forward, building on its data science capabilities. Therefore, Salesforce's (CRM) recent moves to try and retake the initiative in its customers' data were likely seen as a defensive move to the success of Snowflake's model. Insider reported: The software giant is finding itself increasingly intertwined with another unexpected data giant: Snowflake. Increasingly, analysis of the data generated via Salesforce is not happening on Salesforce. It's instead getting piped into Snowflake or other providers, where the work — such as building machine learning models or analyzing customer demographics and behaviors. And Salesforce is addressing that uncomfortable reality with several big strategic moves. - Insider Snowflake Revenue change % consensus estimates (S&P Cap IQ) Therefore, we believe the market is increasingly convinced that Snowflake represents a credible and highly competitive threat to the market's incumbents. Accordingly, Snowflake is expected to report a slower H2'22, as seen above, in line with the company's guidance. Still, a revenue growth rate of more than 50% to exit 2022 (FQ4'23) is highly commendable in a harsh macroeconomic climate. Hence, Snowflake's robust execution has likely drawn higher conviction from investors. Is SNOW Stock A Buy, Sell, Or Hold? SNOW NTM Revenue multiples valuation trend (koyfin) SNOW was pummeled as it bottomed out in June at a valuation well below its mean. However, we believe the de-rating was justified, given its weak operating profitability. Furthermore, a discernible growth premium is still embedded at the current levels.

Sep 07

Snowflake: A Top Cloud Growth Stock

Summary Shares of Snowflake have lost about half of their value in 2022. However, Q2’22 results were great and the firm is seeing strong customer growth and monetization. Shares aren’t cheap, but I believe they have an attractive risk profile regardless. Shares of Snowflake (SNOW) soared 23% after the cloud data platform provider reported better than expected revenue for the second-quarter in August. However, share price weakness has developed in recent days which may create a new buying opportunity. While recognizing that Snowflake trades at a high valuation based off of revenue, the software company is growing extremely fast and has issued a strong revenue forecast for FY 2023. The firm is executing well regarding customer monetization and is adding a significant number of new clients to its platform, especially in the $1M+ revenue category. Since Snowflake is also generating profitable growth, the stock is interesting for the long term! SNOW data by YCharts Snowflake’s Q2’23 results Snowflake is putting up impressive growth numbers quarter after quarter. In the earnings sheet for Snowflake’s second-quarter, the company revealed revenues of $497M, showing 83% year over year growth. Estimates for Snowflake’s Q2’23 called for just $467M in revenue. Product revenue, which represents 94% of Snowflake’s top line, grew at the same rate of 83% year over year. As impressive as Snowflake’s revenue growth in core product revenue is, top line growth has been decelerating… which is what most companies in the cloud market are experiencing in a post-pandemic world. While the pandemic boosted Snowflake's client acquisition and top line growth, the business is in a post-pandemic adjustment period that is seeing moderating growth. In Q1’23, for example, Snowflake generated 85% revenue growth while in FY 2022 the firm’s revenue base more than doubled. Snowflake: Q2'22 (Product) Revenue What also remained impressive in the first six months of FY 2023 is that Snowflake continued to show strong customer acquisition skills, especially in the group of customers that are the most lucrative for the Snowflake platform: customers that have at least a $1M annual product-spend. Snowflake’s total customer count surged 36% year over to 6,808 in Q2’22 which in itself is not bad at all. But Snowflake really has success with large enterprise customers that can afford to spend big bucks on Snowflake’s various products and services. The number of customers with a product-spend of $1M or more soared 112% year over year to 246 in Q2'23 -- three times the rate of its total customers. Snowflake: Q2'22 Customer Account Growth Customer monetization What I also really like about Snowflake is the firm’s strong customer monetization. Cloud-based software companies measure customer monetization through a figure called dollar-based net revenue retention rate. Other cloud companies give this figure different names -- such as net dollar retention -- but they all measure the same thing: the increase of platform spending from one reporting period to the next by the same pool of customers. It is expressed as a percentage and effectively measures internal revenue growth. Snowflake’s dollar-based net revenue retention rate was 171% in Q2’23, meaning the average customer increased its spending on the Snowflake platform by 71% year over year which is extremely impressive. However, Snowflake’s retention rate also dropped two quarters consecutively from a peak of 176% in Q4’22. Snowflake: Dollar-Based Net Retention Rate Snowflake’s outlook for FY 2023 The company’s guidance for FY 2023 calls for product revenue of $1,905-1,915M, implying 67-68 year over year growth, and a free cash flow margin of 17%. In FY 2022, Snowflake’s product revenue was $1,141M and the top line grew 106% that year. Although Snowflake’s growth is decelerating, I believe the forecast for FY 2023 is very strong. Snowflake is expensive, but worth the price Snowflake’s shares are trading at a premium valuation factor and this is due to the firm’s exceptional execution regarding top line growth and customer monetization. Snowflake is also wildly profitable which distinguishes the company from most other start-ups that are still generating losses. Snowflake generated free cash flow ("FCF") of $53.8M in Q2’23 and the firm's FCF has ramped up nicely in the last year: Snowflake has been consistently FCF profitable in the last four quarters... SNOW Free Cash Flow (Quarterly) data by YCharts Based off of $3.11B in revenues estimated for FY 2024, Snowflake is trading at a price-to-revenue of 17.7 X. The average P-S ratio in the last year was 31.1 X, so Snowflake trades at a significantly lower valuation factor after a near-50% drop in pricing...

Shareholder Returns

SNOWUS ITUS Market
7D-6.8%-5.9%-5.2%
1Y-45.6%-39.2%-23.0%

Return vs Industry: SNOW underperformed the US IT industry which returned -39.2% over the past year.

Return vs Market: SNOW underperformed the US Market which returned -23.1% over the past year.

Price Volatility

Is SNOW's price volatile compared to industry and market?
SNOW volatility
SNOW Average Weekly Movement10.9%
IT Industry Average Movement8.0%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: SNOW is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 11% a week.

Volatility Over Time: SNOW's weekly volatility (11%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

FoundedEmployeesCEOWebsite
20124,991Frank Slootmanhttps://www.snowflake.com

Snowflake Inc. provides a cloud-based data platform in the United States and internationally. The company’s platform offers Data Cloud, which enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data. Its platform is used by various organizations of sizes in a range of industries.

Snowflake Inc. Fundamentals Summary

How do Snowflake's earnings and revenue compare to its market cap?
SNOW fundamental statistics
Market CapUS$55.06b
Earnings (TTM)-US$675.61m
Revenue (TTM)US$1.64b

33.6x

P/S Ratio

-81.5x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
SNOW income statement (TTM)
RevenueUS$1.64b
Cost of RevenueUS$576.13m
Gross ProfitUS$1.06b
Other ExpensesUS$1.74b
Earnings-US$675.61m

Last Reported Earnings

Jul 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-2.11
Gross Margin64.82%
Net Profit Margin-41.25%
Debt/Equity Ratio0%

How did SNOW perform over the long term?

See historical performance and comparison