SNOW - Snowflake: Rare Buying Opportunity Alert

2024-03-24 12:28:50 ET

Summary

• Snowflake shares corrected significantly in the aftermath of weak FY25 guidance and CEO transition.
• I believe these concerns are overblown and the recent meltdown presents a rare buying opportunity for long-term investors.
• Stabilizing consumption trends, strong bookings, new product launches, easy-to-beat guidance, and reasonable valuation are my main arguments in favor of buying shares now, not to mention potential benefits of CEO transition.

Introduction and investment thesis

Last time I’ve covered Snowflake ( SNOW ) following its FY24 Q3 earnings release, where I rated the company’s shares as a Strong Buy. Important new product launches, some of which are already contributing to revenues combined with stabilizing consumption trends and a decreased valuation premium have been my main arguments in favor of buying shares.

Although the share price reaction following the FY24 Q4 earnings release proved my previous Strong Buy recommendation premature, I am still bullish on the company’s prospects with even more conviction than before....

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