Snowflake is currently the hot IPO everyone wants a piece of, yet little stock is available. I'm not sure how to characterize it.". Snowflake offers a cloud-based SQL data warehousing platform designed to safely handle all aspects of data management and analytics including the storage analysis of structured and semi-sturctured data. He’s an absolute legend in the tech industry, as he led not one but two small companies up the growth curve to tremendous heights. After-hours: $244.12 +0.15 (0.06%) Oct 12, 5:31 PM. It’s going to be one of the SaaS leaders in coming years as much of the competition falls by the wayside.
The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. On Monday, Nandury urged investors to …
Even Zoom Video (NASDAQ:ZM) — the previous leader in high-growth high-priced stocks — only reached half the price-sales ratio that Snowflake obtained. All rights reserved. As new IPOs come along and more Snowflake shares hit the market, market dynamics will get back in line.
Shares of Snowflake (NYSE:SNOW) have come too far, too fast. So far, that's looking like a pretty good bet, as Berkshire has gotten a quick double on its shares. Image source: Getty Images. Keep Snowflake at the top of the watchlist. Finance Friday, Snowflake CEO Frank Slootman was asked about the Berkshire investment and what might have led the company to invest in Snowflake.
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And when stocks are temporarily valued too highly by investors, they often come crashing down. Clearly, Combs liked the product and was willing to pay a hefty price for shares at the outset.
This is unprecedented for a firm with as small a revenue base as Snowflake. It was initially slated to go public at $75 to $85 per share last Wednesday, but interest in the stock was so high that the company wound up issuing shares at $120 on its IPO day. 1125 N. Charles St, Baltimore, MD 21201. By contrast, with Snowflake, administrators set up just one unified cloud data network, and can run all their data analysis, processing, science, sharing, etc. However, I’m skeptical that this is the best price Snowflake will ever be offered at.
Berkshire Hathaway (NYSE:BRK.B) invested in the IPO, helping to drive up demand — and thus the price — dramatically.
I’d argue that this is because Snowflake has some superstar investors. However, as Snowflake matures and offers more stock while insiders sell off holdings, it will free up supply of trading shares. This solves many problems around having multiple databases, multiple user authentication schemes, and various security and compliance problems that come with a cobbled-together data network. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund.
Let's conquer your financial goals together...faster. At least part of the enthusiasm for Snowflake's shares came from the fact that Warren Buffett's conglomerate, Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B), bought hundreds of millions in stock, which was a huge surprise. Stock Advisor launched in February of 2002. Snowflake’s net revenue retention rate is also a stunning 158%. However, before you get too enthusiastic, consider that Snowflake's price-to-sales multiple is 156, almost 6 times the valuation of Google at its IPO. Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha.
That's because Buffett has long admitted that he made a mistake by not investing in Google, now named Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL). So why are investors paying 170x sales for Snowflake’s shares?
What makes Snowflake unique? There are other fantastic SaaS companies as well, yet Snowflake’s current valuation is in a league of its own. I wouldn’t bet against Snowflake’s CEO Frank Slootman. The hottest IPO of the year is cloud-based data warehouse provider Snowflake (NYSE:SNOW).
So says Summit Insights analyst Srini Nandury. But now it’s trading for a $70 billion valuation.
With its focus on totally overhauling data management, Snowflake has the potential to be a true game-changer across the tech landscape. Cumulative Growth of a $10,000 Investment in Stock Advisor, Now We Know Who at Berkshire Invested in Snowflake, and Why @themotleyfool #stocks $SNOW $BRK-A $BRK-B $GOOGL $GOOG, Snowflake Signs Multimillion-Dollar Deal With Goldman Sachs, Forget Snowflake, These 3 Tech Stocks Are Better Buys Right Now, 3 High-Risk, High-Reward Stocks to Add to Your Watchlist, These 3 Stocks Are Absurdly Overvalued Right Now, Don't Ignore This Glaring Problem in Cloud Computing Stocks, Copyright, Trademark and Patent Information. If he's correct, shareholders in the recent initial public offering could sustain losses of roughly 25%. On the date of publication, Ian Bezek held a long position in BRK.B stock. It also has a tech legend running the firm.
Snowflake’s broad mission is to give users one cloud where they can store all their data seamlessly, then manage who has access to things. 2020 InvestorPlace Media, LLC. And so that's a very different crowd from the people you saw on Wednesday, that were chasing this thing up. So it's certainly possible that Snowflake's shares could fall back to $175, which would still be more than 45% higher than what it priced its IPO at just a few days ago. Cumulative Growth of a $10,000 Investment in Stock Advisor, Snowflake Stock Will Plunge 25% to $175, According to This Analyst @themotleyfool #stocks $SNOW, Snowflake Signs Multimillion-Dollar Deal With Goldman Sachs, Forget Snowflake, These 3 Tech Stocks Are Better Buys Right Now, 3 High-Risk, High-Reward Stocks to Add to Your Watchlist, These 3 Stocks Are Absurdly Overvalued Right Now, Don't Ignore This Glaring Problem in Cloud Computing Stocks, Copyright, Trademark and Patent Information. I’m personally looking for a sub-$200 price to open a starter position. Certainly, with Berkshire having gotten behind Snowflake's product and its stock, you might think of jumping in. Buying a high-growth, money-losing, and expensive-looking initial public offering was a very uncharacteristic move for Berkshire, which has famously avoided technology stocks and especially red-hot IPOs for its entire corporate life. He battle-tested his investment philosophy and strategies as portfolio manager of Tier 1, a market-crushing Motley Fool real-money portfolio that delivered 24.58% annualized returns during its existence. Fast-forward to today, and Alphabet's market cap is almost $1 trillion, up 17 times the IPO price in 16 years. All pulled back more than 50% multiple occasions, and 80-90% drops are hardly out of the question. Let's conquer your financial goals together...faster. Copyright © 2020 InvestorPlace Media, LLC. 1125 N. Charles St, Baltimore, MD 21201.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Nasdaq He sees shares hitting $175, down from their current price near $235. Article printed from InvestorPlace Media, https://investorplace.com/2020/09/snow-ipo-is-a-must-own-cloud-stock-once-shares-pull-back-cseo/.
Just prior to the IPO, Snowflake had 3,117 different customers. Yet, that’s not as crazy as it sounds. Snowflake also has strong network effects because it allows customers to share data seamlessly with other Snowflake clients.
Shares of Snowflake (NYSE:SNOW) have come too far, too fast. And there was zero discipline that has, you know, been pointed out by other observers.
Snowflake will probably eventually grow into its current market cap. See you at the top! Berkshire now owns 15% of Snowflake. For example, Amazon (NASDAQ:AMZN) stock dropped 93% from its dot-com peak to its post-2000 crash lows. Equally important, Snowflake is landing huge clients. According to the prospectus, it already has seven of the top 10 Fortune 500 companies as customers, and 146 out of the 500. That said, Snowflake does have some notable backers -- such as Warren Buffett's Berkshire Hathaway and cloud software titan salesforce.com -- that don't appear to have any intention of selling anytime soon. When you attract many of the world’s biggest companies to your cloud, and then get them to increase their spending at an exponential growth rate, you’ve got a monster on your hands.
Additionally, Salesforce (NYSE:CRM) bought a 10% stake, and Altimeter Capital Management picked up another 13% of the company. Snowflake is one of the best SaaS companies in the world. Analyst Srini Nandury says Snowflake's stock could lose a quarter of its value. Slootman also added that "they are also evolving to become a much more tech-aware, tech-focused, tech centric conglomerate" and that "maybe that's the younger generation at Berkshire.
Returns as of 10/22/2020. Snowflake (NYSE:SNOW) has been undoubtedly one of the year’s biggest initial public offerings (IPOs).
Now, Joe’s mission is to pass on what he’s learned -- and what he continues to learn -- as a contributing writer to Fool.com. Snowflake stock continues to draw mixed reviews as more analysts initiate coverage on the provider of cloud-based data analytics software following its initial public offering. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. Simply put, the company is enjoying unprecedented revenue growth for a software-as-a-service (SaaS) company. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Add those together, and a large chunk of the stock has been purchased by institutions, reducing the free float dramatically. On Monday, Nandury urged investors to sell Snowflake stock. That is to say, it runs the same on-premise or in the cloud. That’s not a call on where it trades tomorrow or next week, however there’s a good chance you’ll have a better entry point in coming months. from one place. However, during the same interview, Slootman also admitted the company had received far more interest than even he, as a big-time owner of the stock, had ever imagined. His last company, Servicenow (NYSE:NOW) is up 20x since the Slootman took it public back in 2012. We're trying to atone.". They were buying, you know, at any price. That’s despite not even doing a billion in annual revenues yet and running massive losses. At the current price, Snowflake is worth almost $70 billion. quotes delayed at least 15 minutes, all others at least 20 minutes.
It sure sounds as if Slootman is looking for the type of Foolish investor behavior we encourage, but it also seems that even he thought Snowflake's massive spike on Wednesday was ahead of the fundamentals.