Snowflake: I'm Still Unconvinced (Technical Analysis, Rating Upgrade)

Jun. 08, 2025 2:24 AM ETSnowflake Inc. (SNOW) StockSNOW
Bay Area Ideas
2.02K Followers
(11min)

Summary

  • Technical strength is impressive, with the stock near 52-week highs. Further gains are likely moving forward as most indications remain bullish.
  • Q1 earnings were mixed, with revenue growth hitting multiyear lows and cash flows showing weakness. Q2 guidance shows a further growth slowdown is expected.
  • The P/S ratio's rebound and large premium over the IT sector is unjustified due to weakening growth and contracting gross margin, making the stock overvalued.
  • Due to technical strength, I upgrade the stock to a hold rating, but the fundamental setup remains undesirable at these levels.
Snowflake corporate headquarters in Silicon Valley

Sundry Photography

Intro

Snowflake Inc. (NYSE:SNOW) has advanced around 35% since my sell rating back in early March, but I remain unconvinced by the company's fundamental setup. Still, I'm upgrading the stock to a hold on technical strength. In the below analysis, I determine

This article was written by

2.02K Followers
I'm a full-time investor with a strong focus on the tech sector. I graduated with a Bachelor of Commerce Degree with Distinction, major in Finance. I'm also a proud lifetime member of the Beta Gamma Sigma International Business Honour Society.My motto is John Pierpont Morgan's phrase: 'First-Class Business In A First-Class Way.' I strive to be a premier provider of technical analysis articles on Seeking Alpha by sharing high-quality in-depth pieces with our community of readers.My core values are: Excellence, Integrity, Transparency, & Respect. I always, to the best of my ability, hold true to these values which I believe are key for long-term success.Lastly, I would like to invite all of my readers to leave their constructive criticism and feedback in the comments section so that I can further enhance the quality of my work moving forward. Thank you and God Bless America!

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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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