Snowflake: Beat Q2 Earnings, Here’s Why The Stock Is Melting

Summary:

  • Snowflake Inc. reported strong earnings, but shares fell ~15% due to concerns around forward guidance and revenue growth deceleration.
  • Stock-based compensation expenses are still too high, impacting profitability and shareholder value, while the company’s valuation remains unsustainable based on its forward P/E.
  • Despite the potential of AI data cloud, Snowflake’s slowing growth, high costs, and unprofitable operations make it a strong sell.

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Investment Thesis

Snowflake Inc. (NYSE:SNOW) reported earnings after the bell on Wednesday. Even with the software company delivering quarterly results that beat on both the top and bottom line, shares


Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMZN,PLTR 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.

Noah Cox (account author) is the managing partner of Noah’s Arc Capital Management. His views in this article are not necessarily reflective of the firms. Nothing contained in this note is intended as investment advice. It is solely for informational purposes. Invest at your own risk.

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