Analysis of the Snowflake Stock
According to 32 expert projections, the average target price for Snowflake stock over the next 12 months is USD 202. The average analyst rating for Snowflake is a Strong Buy. Based on 3 good signs and 7 negative signals, Stock Target Advisor’s personal stock analysis of Snowflake is somewhat bearish (Slightly Bearish). The stock price of Snowflake was $150.47 at the most recent close. The stock’s price for Snowflake has fluctuated by -11.02% over the previous week, -12.78% over the previous month, and -57.39% over the previous year. The average Crowd target for the stock is $297 per share, with a consensus Crowd rating of a Strong Buy.
As snowflake’s stock was reeling from sympathy pains from Crowdstrike’s earnings that underwhelmed investors, Snowflake’s stock was maintained at Zacks Research with a Buy rating. STA Research issued a research note, and upgraded the stock to a Strong Buy rating, from a Buy, citing the stock is entering extreme oversold continues, as news emerge that the company is gaining significantly on it’s competitors, possibly signifying another solid quarter to be released in September. Analyst’s believe that the cloud stock’s over reaction today, was caused more by Short Sellers pushing to close positions, than analysts and investors worrying about fundamentals.
Snowflake Bio. (SNOW:NYE)
A cloud-based data platform is offered both domestically and abroad by Snowflake Inc. Data Cloud, a feature of the company’s platform, enables users to combine their data into a single source of truth to get actionable business insights, create data-driven applications, and share data. Various sized enterprises across a range of industries use its platform. In April 2019, the business changed its name from Snowflake Computing, Inc. to Snowflake Inc. Incorporated in 2012, Snowflake Inc. is situated in Bozeman, Montana.
Snowflake stock fell on Friday’s trading,as the stock fell on CrowdStrike’s earnings that failed to excite investors, and all cloud stocks suffered as a result.
Datadog’s strong earnings wasn’t enough to allay broader worries about the concern of higher interest rates and weaker growth in the software business. The entire SaaS industry experienced a steep sell-off on Friday as a result of a number of other SaaS businesses reporting reduced forward growth estimates.
Atlassian and Twilio also both released poor earnings reports in the enterprise software space. Twilio reduced its long-term growth target from 30 percent to 15-25 percent, and Atlassian slashed its fiscal 2023 guidance. Cloudflare, the company who is provider of cybersecurity software, topped expectations in terms of revenue and losses per share and increased its guidance, but it wasn’t enough to ease investor concerns over macro conditions.
Therefore, despite Datadog having a strong quarter and improving guidance yesterday, Snowflake and Datadog all fell in a sympathy trade with Twilio and Atlassian, while CrowdStrike is dropping in sympathy with Cloudflare.
Federal Reserve head, Jay Powell voiced concern on Wednesday that inflation was still running too high and that interest rates could have to be revised upward, which put pressure on these stocks, which fundamental doesn’t really have a direct causation, as it’s just really about investor sentiment.
Growth stocks that tend to have little to no profit suffer from increased interest rates because they devalue cash flows that are projected further into the future. The Snowflake stock is currently trading at a 25 times sales multiple, Datadog at a 16 times sales multiple, and CrowdStrike at a 16 times sales multiple, these companies are still not inexpensive by conventional financial standards.
Positive Fundamentals for Snowflake Stock:
High market capitalization:
This organisation is among the top quartile and is one of the biggest in its industry. These businesses are typically more reliable.
Low Financial Volatility
For a hold duration of at least 12 months, the stock’s yearly returns have been stable and constant when compared to peers in its industry, and they are in the top quartile. Although stability is desirable, it can also restrict returns.
Healthy cash flow
The last four quarters saw positive total cash flow for the organisation.
Negative Fundamentals for SNOW:
Subpar risk-adjusted returns.
In comparison to its rivals, this company’s risk-adjusted return performance is below average. The returns are unpredictable, even if it is outperforming in terms of returns. Be careful as you go.
Lower than average dividend returns
In comparison to its competitors, the company’s average income yield during the past five years has been low. If you are not seeking for work, it is not an issue.
Compared to book value, it is overpriced
On a price to book value basis, the stock is selling at a premium to the median of its peer group.
Overpriced based on cash flow
On a price to cash flow ratio, the stock is trading at a premium to that of its competitors. Its pricing is higher than the sector median. Whenever you are thinking about buying, go with prudence.
Free cash flow that is negative
In the last four quarters, the company’s overall free cash flow was negative.
Low growth in earnings
Compared to its sector, this stock’s five-year median earnings growth was lower than average.
Low Growth in Revenue
Compared to its sector, this stock’s five-year median revenue growth was lower than average.
Snowflake stock is currently rated with a fundamental score of 3.3 out of 10, where 0 is very bad and 10 is very good.