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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For further details see:
Snowflake: Growth Hopes Melt Like Snow