Hey Global Investor, here’s what you need to know before the US markets open.
Market Snapshot 📈
S&P 500 (Thursday Close) 3,666.72 −2.29 (0.062%)
NASDAQ (ThursdayClose)12,377.18 +27.82 (0.23%)
FTSE 100 (5 PM IST) 6547.56 +57.29 (0.88%)
NIFTY 50 (Today’s Close) 13,258.55 +124.65 (0.95%)
USDINR (5 PM IST) 73.71 (1 Year +3.35%)
What Is The Most Expensive Software Company?
Snowflake’s stock surged over 16% on Thursday, as analysts upgraded their price targets.
Background: Largest software IPO. Scalable database software that’s compatible with the cloud services of all three major players – Amazon, Microsoft, and Google. Impressive growth track record. Enough to get Warren Buffet and Salesforce in on the action. That was Snowflake in September.
Things only got better! In the last quarter, the company added 12 Fortune 500 firms as clients, signed multi-year enterprise deals, and gross margins crossed 70%. The result? The IPO price of $120 did not matter. The first trade was at an incredible $245 per share. Given the company’s performance since then, it seems even that was low!
What Happened? Snowflake’s first quarterly report (fiscal Q3) as a public company was impressive.
- EPS: -$1.01 (it was -$1.92 in the year-ago quarter)
- Revenue: $159.6M (119% revenue growth compared to the year-ago quarter)
The company expects fiscal Q4 revenue to be up 103% Y-o-Y. 65 customers contributed $1M each in the last 12 months.
With a market cap of $90B, the stock is trading at a forward multiple of 160X for FY21 sales and a multiple of 83X for FY22 sales. That makes Snowflake the most expensive software company on earth. The fact that even at this scale, the company is expecting 100+% growth did not escape the eagle-eyed analysts. Some of them have raised their target price for the stock to between $310 – $320.
It seems Snowflake is determined to make light of even these estimates as it continues to grow at breakneck speed
Market Reaction: On the back of these analyst upgrades, Snowflake closed yesterday at $339.89, up 16.13%. The stock is up ~40% since its debut.
Company Snapshot 📈
SNOW $339.89 +47.20 (+16.13%)
Analyst Rating (23 Analysts) BUY 43%, HOLD 48%, SELL 9%
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Later Today 🕒
- 7.00 PM IST: Nonfarm payrolls
- 7.00 PM IST: Trade deficit
- Before Market Open: Big Lots Inc Earnings (BIG)
- Before Market Open: Huazhu Group Ltd Earnings (HTHT)
Fun Fact of The Day 🌞
Women have a better sense of smell than men