SNOW - Snowflake: Bullish Support Still Missing Despite Raised Guidance Meltdown Persists

2024-06-18 09:00:00 ET

Summary

• SNOW is increasingly punished, thanks to the change in its go-to-market strategy, impacted retention rate, and declining remaining performance obligations.
• Combined with the bloated operating expenses, underwhelming bottom-lines, and inflated SBC expenses to revenue ratio, we are unlikely to see bullish support materialize anytime soon.
• SNOW remains overly expensive compared to its peers as well, attributed to the slower AI monetization and delayed AI capability launches through H2'24.
• As a result, investors may also want to temper their near-term expectations, since its turnaround to high-growth may be prolonged.
• Interested investors will be better off observing for a floor to materialize first, before establishing their position and/ or dollar cost averaging. Do not chase this stock to the bottom.

We previously covered Snowflake (SNOW) in March 2024, discussing how it had dramatically lost much of its Enterprise Value despite the double-beat FQ4'24 earnings call....

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