Snowflake Q4 FY1/25 Earnings Review
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Today we cease coverage of Snowflake Software because … I can think of 1000 things better to do with one’s time and/or capital than worry about Snowflake stock. The company has seen decelerating growth since it joined the public market. Cashflow margins meander around the place but have yet to put in a clear uptrend to offset the downtrend in revenue growth. The order book (RPO) had seen accelerating growth in recent quarters but that has not translated into accelerating recognized revenue growth and in any event RPO is now slowing once more. The stock has been rangebound since 2022. This company is not, I believe, core to tomorrow’s tech stack and the stock is not, I believe, core to large investors’ holdings. So … why bother?
For good order the fundamentals, valuation multiples, and stock chart are below.
Fundamentals
Valuation Multiples
It’s not often in tech I think “that’s just silly”, on account of valuation multiples being usually silly vs. any classical valuation theory but … this is just silly. 86x trailing twelve months’ cashflow? No thankyou.
Stock Chart
Sideways and rangebound for three years. That’s fine by the way in an index because you can just trade the index long, short, long, short for as long as the sideways action lasts. A very profitable pursuit in fact. But in a single stock name with earnings risk and no cheap & easy way to play the short side, and the risk of getting badly hurt on the shorts if the market rips? No thankyou.
You can open a full page version of this chart, here.
We move to Not Rated and hereby drop coverage. (Obviously the stock will now moon. I can live with that).
Cestrian Capital Research, Inc - 30 April 2025.
Afterword
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Ryan Vingris