# Snowflake Inc. (SNOW)’s Outlook Disappoints, Shares Reach Below IPO Price, Buy/Sell/Hold?

Related Topics

The stock market has faced severe blows in 2022 so far amid the geopolitical and economic situation. Its steep drop has incited panic and panic has further fueled the sell-off. However, taking an enormous hit are the technology stocks which have fared relatively worse. The reason is their higher uptick in the last two years as the pandemic led to a technological revolution. The tech-heavy Nasdaq is currently in the bear market territory with losses from its highs extending to nearly 30%. But amid this downfall, many cloud stocks have fallen much lower with Snowflake Inc. (SNOW) down over 60% year to date.

In September 2020, SNOW, with its stellar customer growth, pulled off the largest IPO ever by a software company, raising $3.4 billion. With an IPO price of$120, the stock then rallied to near $400 within months. However, 2022 has brought about a severe downfall in the stock. With its debatable valuations, stellar revenue growth, and bullish industry outlook, the stock has mixed reviews right now. Table of Contents ## What’s the Latest? On May 25, the company came out with financial results for the first quarter of fiscal 2023. The company’s earnings and revenues surpassed the consensus estimates. But the whole year’s guidance fell below the expected, which led the stock on a downtrend post the earnings release. Hence, the SNOW lost 14.14% in the pre-market to reach$114.00, falling well below its IPO price. This downtrend followed an increase of 2.42% in the prior session, which had the stock valued at $132.47 per share. ## SNOW’s Earnings Highlights The cloud-based data warehousing company posted revenues of$422.37 million, which improved by 85% YOY. The quarterly revenues surpassed the consensus estimate by 3.11%.

Growing 85% YOY was the product revenue of $394.4 million while remaining performance obligations totaled$2.6 billion.

For the quarter ended April 30, 2022, SNOW had a net revenue retention rate of 174% while the details of customers are in the chart below:

The company’s quarterly earnings stood at $0.01 a share, while analysts were expecting a loss of$0.01 per share. On the other hand, the year-ago loss was $0.24 per share on an adjusted basis. The first quarter of fiscal 2023 witnessed a record non-GAAP adjusted free cash flow of$181 million.

### Fiscal 2023 Guidance & Future Outlook

For the full-year fiscal 2023, the company provided the following guidance:

The company’s guidance for the fiscal year came below the analysts’ expectations, which caused the recent sell-off of the stock. Analysts were expecting earnings of $0.12 million on revenues of$2 billion for the full year. For the ongoing quarter, the consensus estimate is an EPS of $0.01 on revenues of$464.02 million.

## Conclusion

While the opinions on SNOW’s current valuation are mixed with an affinity towards it being undervalued, the company does have a bullish long-term outlook. The company boasts a strong profile with positive free cash flow and a huge net revenue retention rate. With a bullish outlook of the industry and its strong, improving position near profitability, SNOW has a bright future ahead. The stock might not be a buy right now but as it nears profitability in the fundamental shift towards cloud computing, it would definitely be a good value stock to add to one’s portfolio.

### Crypto ATH Coins and Top Movers (24H)

Even though the wider crypto-market as a whole is currently experiencing severe stresses, and market sentiment remains locked in on the extreme fear zone, several

### Best Cloud Stocks to buy before Christmas

The widespread volatility in the stock market has investors taking the side of caution. However, those with a penchant for investment are well aware that

### Top 5 AI Stocks To Invest In The Last Quarter Of 2022

As the world continues its push with advanced technologies and smart solutions, the realm of AI continues to prove as being a domain that will

### Beat Q4 FY22 but Poor Outlook: Snowflake Inc. (SNOW) Plunges Down Premarket

On March 2, Snowflake Inc. (SNOW) posted its financial results for Q4 fiscal 2022 along with a future outlook. While the company beat its expectations

## The Role of Treasury Stock in Corporate Finance

Related Videos

Latest Posts

### Fundamental Analysis of Stocks: A Comprehensive Guide

Assessing investments in the stock market through fundamental analysis of stock is a critical approach.

### Income vs Growth Funds: Finding the Right Investment Strategy

The concept of the investment fund is a wonderful and innovative devise that aids investors

### Strategic Asset Allocation Model: Balancing Risk and Reward in Portfolio Management

The Strategic Asset Allocation model is a powerful tool that enables investors to make informed

### The Impact of Operating Leverage on Business Performance

Operating leverage is a concept that has significant implications for business performance, and understanding it