Should you buy Snowflake stock? (March 2024)

Published first at https://www.3minutebreakdowns.com Snowflake stock analysis. Ticker: $SNOW Snowflake just reported earnings and the stock dropped 18%. At the current price, the company has a market cap of 68 billion dollars. With 4.8 billion of cash and investments and no debt, the enterprise value is 63.2 billion. Revenue over the last 12 months grew 36% to 2.8 billion with 813 million of free cash flow. However, net income was negative -836 million, mainly due to a large chunk of stock based compensation. At first glance, Snowflake earnings look pretty good. 4th quarter revenue was up 32% year over year, gross margins improved to 78% and the company achieved a best in class retention rate of 131%. But there were two pieces of news that spooked investors. First, was the resignation of highly regarded CEO Frank Slootman and second was company guidance for 2024. Full year revenue is expected to grow only 22% this year to 3.25 billion. 22% growth may sound decent but for a company valued at 23 times revenue, it’s probably not enough. And it continues the long term trend of decelerating revenue growth. Considering the recent boom in AI there’s a concern that Snowflake may be losing out to competitors like Databricks. However, there could be another way to interpret these results. #investing #stocks #stockstobuy #3mb