What Can We Learn From Snowflake Inc.(SNOW)’s Valuation Ratios?

Snowflake Inc. (NYSE:SNOW) finished Wednesday with an addition of $14.91 to close at $327.85, an upside of 4.76 percent. An average of 2,374,880 shares of common stock have been traded in the last five days. There was a gain of $18.23 in the past week. The last 20 days have seen an average of 3,475,740 shares traded, while the 50-day average volume stands at 4,226,952.

SNOW stock has increased by 2.69% in the last month. The company shares reached their 1-month lowest point of $290.01 on 10/05/21. With the stock rallying to its 52-week high on 10/13/21, shares of the company touched a low of $184.71 and a high of $429.00 in 52 weeks. In spite of this, the price is down -23.58% from the 52-week high.


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Insider Transactions

9 days have passed since Snowflake Inc. (SNOW) last reported insider trading activity. McMahon John Dennis, who is Director, most recently acquired $41,090 shares at $291.44 per share on Oct 05. In this transaction, the insider spent $11,975,272. Chief Revenue Officer, Degnan Christopher William, disposed of 38,344 shares at a price of $302.50 on Oct 01. The insider now owns more than $11,599,124 worth of shares. Prior to that, CEO and Chairman Slootman Frank went on to Sale 63,093 shares at $311.74 each on Sep 20. An amount of $19,668,578 was transacted.

Valuation Metrics

Snowflake Inc. (SNOW) has a trailing price-to-earnings (P/E) ratio of 29.20 for the broader industry and 37.24 for the sector. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 118.31, the price-to-book (PB) ratio at 19.66.

The quick ratio of Snowflake Inc. for the three months ended July 30 was 5.10, and the current ratio was 5.10, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.00 and a total debt to equity ratio of 0.00 for the quarter ending July 30. Snowflake Inc.’s EBITDA margin for the year ending July 30 is -84.56%, while its operating margin for the same period stands at -91.10%. Its gross profit as reported stood at $349.46 million compared to revenue of $592.05 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Snowflake Inc.’s return on assets was -12.90%. For the broader industry, ROE averaged 3.34 over the past year.

Earnings Surprise

For the three-month period that ended July 30, Snowflake Inc. had $3.44 billion in cash. The analyst consensus anticipated Snowflake Inc.’s latest quarter earnings to come in at -$0.15 per share, but it turned out to be -$0.04, a 73.30% surprise. For the quarter, EBITDA amounted to -$173.58 million. Shareholders own equity worth $300.9 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Snowflake Inc. (SNOW) price momentum. RSI 9-day as of the close on 13 October was 65.27%, suggesting the stock is Neutral, with historical volatility in this time frame at 38.31%.

As of today, SNOW’s price is $316.83 +5.89% or $18.23 from its 5-day moving average. SNOW is currently trading +1.16% higher than its 20-day SMA and +40.47% higher than its 100-day SMA. However, the stock’s current price level is +15.20% above the SMA50 and +8.27% above the SMA200.

The stochastic %K and %D were 71.99% and 68.54%, respectively, and the average true range (ATR) was 11.57. With the 14-day stochastic at 95.22% and the average true range at 11.44, the RSI (14) stands at 61.92%. The stock has reached 6.59 on the 9-day MACD Oscillator while the 14-day reading was at 8.69.

Analyst Ratings

BTIG Research upgraded Snowflake Inc. (NYSE: SNOW) to a a Buy rating in its most recent analyst report. Previously, the stock was rated as a a Neutral.The consensus rating for Snowflake Inc. (SNOW) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell SNOW, while 13 suggest investors hold. There are 1 analyst who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 15 others rate it as a “buy”.

What is SNOW’s price target for the next 12 months?

Analysts predict a range of price targets between $275.00 and $515.00, with a median target of $320.00. Taking a look at these predictions, the average price target given by analysts for Snowflake Inc. (SNOW) stock is $331.83.

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