Snowflake stock analysis #shorts
Snowflake stock analysis. For more detailed investing ideas visit our website https://www.overlookedalpha.com
Cloud data company Snowflake just reported a strong Q3.
Revenue was up 67% year over year to 557 million and adjusted free cash flow more than tripled to 65 million. That means annual revenue will be just short of two billion.
But, Snowflake stock is still expensive. With a 44.6 billion enterprise value, the company is valued at 24 times this year's revenue.
And, when you account for 780 million of stock based compensation, actual free cash flow AND net income are both negative.
There’s no doubt, Snowflake is a high quality business.
A revenue retention rate of 165% is best of breed, even if it is down from its peak.
And total customers continue to climb, increasing 34% year over year.
But how much growth is baked in?
#snowflakestock #stocks #investing #shorts #overlookedalpha #stockmarket #finance #wallstreet
Cloud data company Snowflake just reported a strong Q3.
Revenue was up 67% year over year to 557 million and adjusted free cash flow more than tripled to 65 million. That means annual revenue will be just short of two billion.
But, Snowflake stock is still expensive. With a 44.6 billion enterprise value, the company is valued at 24 times this year's revenue.
And, when you account for 780 million of stock based compensation, actual free cash flow AND net income are both negative.
There’s no doubt, Snowflake is a high quality business.
A revenue retention rate of 165% is best of breed, even if it is down from its peak.
And total customers continue to climb, increasing 34% year over year.
But how much growth is baked in?
#snowflakestock #stocks #investing #shorts #overlookedalpha #stockmarket #finance #wallstreet
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NewsTranscript
00:00 Cloud data company Snowflake just reported a strong Q3.
00:03 Revenue was up 67% year over year to $557 million.
00:07 That means annual revenue will be just short of $2 billion.
00:10 With a $44.6 billion enterprise value, the company is valued at roughly 24 times this
00:15 years revenue.
00:16 And when you account for $780 million of stock based compensation, actual free cash flow
00:21 and net income are both negative.
00:23 There's no doubt Snowflake is a high quality business.
00:26 A revenue retention rate of 165% is best of breed, even if it is down from its peak.
00:32 Snowflakes own revenue target for 2029 is $10 billion, with a 25% free cash flow margin.
00:39 That equates to $2.5 billion in free cash flow in 6 years time.
00:43 Apply a 35 times multiple to that figure gives us an enterprise value of $88 billion in 6
00:48 years time and that works out to an investment return of 11.9%.
00:52 So to buy a Snowflake you really need to think the company is going to blow out its targets.
00:56 For more detailed analysis visit our website overlookedalpha.com