Snowflake: A Compelling Buy Opportunity Despite Recent Setbacks


  • Snowflake’s high valuation and decelerating revenue growth has contributed to its underperformance over the past year.
  • Management changed its sales practices to emphasize Product revenue growth.
  • The company should be a significant beneficiary of Artificial Intelligence adoption.

Snowflake corporate headquarters in Silicon Valley

Sundry Photography

Since I last wrote about the data platform Snowflake (NYSE: SNOW) with a buy recommendation on March 4, 2024, it has been a downhill ride. The stock is down 23.46% compared to the S&P

Company name SBC as % of revenue
Snowflake 40%
MongoDB (MDB) 27%
Palantir (PLTR) 20%
ServiceNow 16%
Salesforce 8%

The first quarter of FY 2025 reported Free Cash Flow TTM

(Trailing 12 months in millions)

Terminal growth rate 2%
Discount Rate 10%
Years 1 – 10 growth rate 23.8%
Stock Price (May 29, 2024, closing price) $148.19
Terminal FCF value $6.892 billion
Discounted Terminal Value $33.215 billion
Free Cash Flow margin 26.52%

Analyst’s Disclosure: I/we have a beneficial long position in the shares of GOOGL, AMZN, SNOW either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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