Cloud-Based Data Warehousing Specialist snowflake stock (NYSE:SNOW) is down 55% year-over-year, underperforming the Nasdaq-100, which is down 28% over the same period. The broader cloud software space has taken a beating this year, as Covid-19 slowed demand slightly, while rising interest rates and rising inflation also caused investors to reduce allocations to high-growth companies. snowflake ice Guidance for FY’23 was also lighter than expected, with the company guiding for product revenue of approximately $1.88 billion to $1.90 billion, an increase of 65% to 67% over the previous year, up from 100% of the 100% seen in FY’22 than more levels. Projected growth isn’t too bad for Snowflake, as even a slight deviation from expectations could make a big improvement in the stock’s price, given that it was one of the most valuable stocks in the cloud computing space. . Separately, the stock has also faced pressure as Wall Street analysts have lowered price forecasts in recent months, with some big investors including Salesforce.com selling stakes in the company.
So is Snowflake stock a good value at current levels of $140 per share? Now, with Snowflake’s multiples still high, the company’s 20x . doing business on more than ZRX further revenue. This leaves the company, which has remained unprofitable, vulnerable in an environment where investors are seeking protection in rapid cash flows and high earnings returns. However, in terms of fundamentals, the long-term outlook for Snowflake looks solid, driven by a continued pivot from on-premises databases to cloud-based warehousing solutions and higher spending by its customers. Snowflake’s product has an advantage over rivals, given its decoupled architecture that separates storage from computing, with customers choosing their cloud service provider of choice. Snowflake previously indicated that its product sales could grow to about $10 billion by 2029 and that the company’s margins are improving as well, meaning it could be solidly profitable over the long term. Snowflake also appears to be generally conservative with its forecasts. For example, for fiscal year FY’22, the company initially guided for 84% product revenue growth from around 81%, but grew at around 106%. This could potentially indicate that the company may surprise upwards in FY’23 as well. We can get an idea of this when the company reports its earnings for the first quarter of FY23, which is due on Wednesday.
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We consider Snowflake stock to be priced around $220 per share, which is about 55% ahead of current market price. View our analysis Snowflake Valuation: Is Snow Stock Expensive or Cheap? for more information. View our analysis snow revenueFor more information about Snowflake’s business model and how its revenue is expected to trend, visit www.snowflake.com.