Entering text into the input field will update the search result below

Snowflake Stock: Prepare For Liftoff

Oct. 03, 2021 5:54 AM ETSnowflake Inc. (SNOW) Stock22 Comments


  • Snowflake pulled back from its prior resistance level.
  • This has created a great opportunity to get in before the rally resumes.
  • The company retains its massive growth advantage over similar stocks, and the valuation is justified as a result.
  • Looking for more investing ideas like this one? Get them exclusively at Timely Trader. Learn More »

Business women studying charts and diagrams on digital tablet closeup

megaflopp/iStock via Getty Images

Tech stocks have been through the wringer this year, to say the least. If you've owned some throughout the year, you probably have a few more gray hairs than you did at the start of 2021. However, the rebound we've seen

If you liked this idea, sign up for a no-obligation free trial of my Seeking Alpha Marketplace service, Timely Trader! I sift through various asset classes to find the best places for your capital, helping you maximize your returns. Timely Trader seeks to find winners before they become winners, and keep you out of losers. In addition, you get access to our community via chat, direct access to me, real-time price alerts, a model portfolio, and more.

Sign up today!

This article was written by

Josh Arnold profile picture

Josh Arnold has been covering financial markets for a decade, utilizing a combination of technical and fundamental analysis to identify potential winners early on in their growth cycles. Josh's focus is mainly on growth stocks. His goal is efficient and profitable use of capital, which overly rigid buy-and-hold strategies do not allow.

Josh is the leader of the investing group Timely Trader where he focuses on limiting risk and maximizing potential reward. Features of Timely Trader include: real-time alerts, a model portfolio, technical charts, sentiment indicators, and sector analysis to find the best trading opportunities. Learn more.

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.

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.

Recommended For You

Comments (22)

six-oh profile picture

"Strong buy" at 300 dollars per share....

I have a value bucket and a growth bucket. In the growth bucket p/e just doesn’t matter. Now, 59x fwd sales is rich, but I do believe a path exists to $10B-$15B in revenue by decade end. If that’s the case, paying 59x fwd sales in 2021 would be a laughable afterthought. If the revenue growth continues in short time today’s price will be cheap.
bluescorpion0 profile picture
@pro-vigil1 you should call it value bucket and gambling bucket. more accurate.
@scorpion.north call it what you wish but companies like nvda, zs, crwd, net, ddog and snow have performed well. Richly valued ? Yes. Some of the best stocks to own for the future of the internet ? Also yes. But unlike many tech investors I agree with you that the risk is too high if i am not diversified.
BigBoeing profile picture
@pro-vigil1 BINGO!! Only *IF* you are not diversified. Exactly my investing philosophy. Nicely said sir. And FWIW...isn't *ALL* investing to some extent a form of a"gambling bucket" as @scorpion.north blithely suggests in his post above? We all hope we win more than we lose. Mr. Market, aka "The House," is a VERY tough and irrational competitor.
stuck profile picture
In reading the responses, I am just supposed to wait maybe 4 years for the value to catch up with the price? No thank you. I do not believe that this company will EVERY be worth 100 billion. It is a complete SNOW job and pumping this sector is getting old.
I have never in my life made an investment based on some form of valuation, like earnings per share or whatever. If that's how you invest you are forever going to be a loser. You either detect a winner or if you can't do that, you put your money in a low cost ETF. I have no stake in Snowflake but I understand the value proposition because I understand the technology. I would never in my life invest in anything that I wouldn't understand. Snowflake would be one of the few companies I would actually understand in terms of its value proposition but not a company I have invested in.
If you don't understand the brilliance of Snowflake in terms of separating cloud compute from storage you probably shouldn't be invested a high-tech stock. Just go back to investing in your checking account.
stuck profile picture
@embarc Thank you for the heart felt investment advice. Invest in a checking account. Sounds too complex for me.
I'm long SNOW with a "toe in the water" but two things concern me. First, the "old standard of value" is what determines the actual worth of a company. Every time I hear the "new standard of value" I know we are close to a top. Second, although it is hard to interpret, the Consensus Revenue Revision Trend chart says SNOW doesn't do well until 2026 then it magically explodes. I've been in Sillycon Valley a long long time and I've seen hundreds of these "greatest things ever" implode. If it's really that good, waiting until 2026 shouldn't be required. Most people in Sillycon Valley don't know what's coming up this weekend let alone five years out.

It's too rich for me to add more but it's probably worth keeping the toe in for awhile.
stuck profile picture
No one knows if this company will ever be profitable. Sorry, I am old school and I think that profit should be part of the business plan. And believing that they will finally make a penny in 2024 does not support a 91 billion dollar current valuation. Remember when companies traded price to EARNINGS? Would a PE of 75 be attractive? Snowflake stock trades at 75 time projected 2022 revenues. While earnings do not seem to matter anymore in the internet software sector, that sector is at least trading at a P/S multiple of about 15. I do not understand how anyone could call this company undervalued. Snowflake is four or five times overvalued at this very high price.
@stuck if they optimized for profitability they could make money. That will come later when revenue is 10x the levels and growth slows down. Took me a long time to understand this concept.
Josh Arnold profile picture
@stuck, @@Varro36 has it exactly right. I don't believe you can value companies like this with traditional methods. If that bothers you, SNOW isn't for you I don't think.
alchemist11 profile picture
@stuck I think that is the prevailing discussion lately. Is the market and stocks like SNOW overvalued? By the old standard of value it is, by the new standard of value, it isn't. I think over time we will see if there is a new paradigm or just grandiose, wishful thinking that has gripped alot of society now.
bluescorpion0 profile picture
i cannot justify 100b market cap for this. too many risks. maybe if it was 50b worth taking a flyer.
Josh Arnold profile picture
@scorpion.north Yes the valuation is by far the biggest hurdle here unfortunately. Thanks for reading!
bluescorpion0 profile picture
@Josh Arnold do you feel snowflake is a replacement for some other portfolio holding? like mobility solutions, iot, or virtualization? Perhaps it can be a proxy for telecom? i guess the question is what do they do exactly? will they be the Matrix one day?
Josh Arnold profile picture
@scorpion.north it's a play on data and cloud, similar to Palantir in a sense, but not telecom or mobility solutions.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About SNOW

SymbolLast Price% Chg
Market Cap
Yield (TTM)
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on SNOW

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.