A strong performer from today's morning trading session is Snowflake, whose shares rose 2.0% to $173.26 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Snowflake Has Elevated P/B and P/E Ratios:
Snowflake Inc. provides a cloud-based data platform for various organizations in the United States and internationally. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 27.16 and an average price to book (P/B) ratio of 6.23. In contrast, Snowflake has a trailing 12 month P/E ratio of -68.5 and a P/B ratio of 10.68.
Snowflake's PEG ratio is 4.25, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
The Company Has a Positive Net Current Asset Value:
| 2020-01-31 | 2021-01-31 | 2022-01-31 | 2023-01-31 | |
|---|---|---|---|---|
| Revenue (MM) | $265 | $592 | $1,219 | $2,066 |
| Gross Margins | 56.0% | 59.0% | 62.4% | 65.3% |
| Operating Margins | -135.3% | -91.9% | -58.6% | -40.8% |
| Net Margins | -131.65% | -91.06% | -55.76% | -38.57% |
| Net Income (MM) | -$349 | -$539 | -$680 | -$797 |
| Net Interest Expense (MM) | 12 | 8 | 9 | 74 |
| Net Interest Expense (MM) | $12 | $8 | $9 | $74 |
| Depreciation & Amort. (MM) | -$4 | -$10 | -$21 | -$64 |
| Earnings Per Share | -$1.46 | -$3.81 | -$2.26 | -$2.53 |
| EPS Growth | n/a | -160.96% | 40.68% | -11.95% |
| Diluted Shares (MM) | 238 | 142 | 300 | 326 |
| Free Cash Flow (MM) | -$199 | -$94 | $57 | $496 |
| Capital Expenditures (MM) | -$23 | -$49 | -$53 | -$50 |
| Net Current Assets (MM) | -$892 | $3,315 | $2,998 | $2,731 |
| Current Ratio | 1.6 | 5.45 | 3.29 | 2.5 |
Snowflake has growing revenues and increasing reinvestment in the business, a pattern of improving cash flows, and an excellent current ratio. However, Snowflake has slimmer gross margins than its peers, consistently negative margins with a positive growth rate, and declining EPS growth.
