Why Snowflake Is Not A Falling Knife

Summary:

  • Snowflake’s stock plummeted 15% post-2Q24 earnings, breaking key support levels, yet it remains a strong rebound investment in the SaaS market.
  • Despite high stock-based compensation expenses affecting GAAP profitability, Snowflake enjoys robust sales growth and positive operating margins.
  • The company reported better-than-expected 2Q24 earnings, with non-GAAP profits of $0.18 per share and a solid sales forecast for the year.
  • Snowflake’s market valuation suggests a potential 42% upside if it achieves consistent GAAP profitability, making it an attractive buy opportunity.

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Snowflake Inc. (NYSE:SNOW) has sold off after the company reported quarterly results for 2Q24 that pointed towards an ongoing deceleration of its sales growth.

The company’s stock price plummeted 15% after earnings and have remained volatile


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

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