PLTR - Snowflake: Growth Hopes Melt Like Snow

2024-05-29 17:38:58 ET

Summary

• Snowflake Inc's business growth has been slowing down over the past few quarters, putting it in a vulnerable position.
• The company's net revenue retention rate has dropped, and operating costs are increasing, leading to negative EBIT and disappointing EPS.
• Despite plans to focus on AI and machine learning, Snowflake's growth is expected to continue to slow, and margins will come under pressure.
• I believe SNOW is a highly overvalued company compared to its peers, while its growth rates should soon approach the industry average.
• I have therefore decided to rate the stock as a "Sell" today.

Investment Thesis

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