টার Reuters Snow Stock: Hyper Growth Drawing Investors
This May, the market has seen some rather impressive negative volatility. Accordingly, growth stocks have seen a sell-off that has dramatically reduced the valuation of many top growth stocks. Unfortunately, this price action did not save Snowflake (SNOW) from insanity.
However, since this short-term sale, shares of Snow Stock have returned nicely. In fact, shares of this cloud computing player have revived about 70% from their bottom about four months ago. Accordingly, long-term investors are enthusiastic about the potential of this company to be rewarded by buying and holding strategies.
The question for many investors is whether this momentum can continue. After all, growth stocks are now fully valued at extremely high levels. Straw can be a single catalyst that breaks the back of a camel. Or, at least, what the bears are saying.
I stay bullish on snow stocks for a variety of reasons. Let’s dive into some of the reasons why investors want this stock to continue to be bullish. (See Snowflake stock chart at TipRanks)
Snow Stock: Play with excellent momentum of growth
Since its dark performance in May, SNOW has recovered 70% in the last four months. This dramatic trend has been encouraged by higher catalysts. Although many investors notice that this buying activity seems to be the result of a change in attitude towards a more long-term average, it is important to remember that these cloud computing stocks may see volatility from time to time.
For now, the pace of snow stocks seems to be heavily bullish. For investors who have held this stock for some time, this is a great thing. However, for those who have missed the dive, it may be worrying to see these gains, as finding another entry point can be difficult, moving forward.
The company’s recent strong earnings have elevated this stock. Cloud computing player has seen a return to top line growth, hopefully bottom line profitability will come soon. As a result, Snowflake has returned 300 per share – a level that cannot be broken again for some time, if this momentum continues.
That said, speed works in both directions. Investors in Snow Stock enthusiasts should keep in mind what happened during the previous negative momentum rally to the negative momentum. It is an extremely valuable stock that can take up more space in the bear market than any other value player. Accordingly, investors should always keep in mind to keep such stocks in a well-diversified portfolio.
That said, in terms of the long-term potential of snowflakes, there are reasons to be bullish. It is a stock that has the potential to perform really well in a market with positive dynamics. Many analysts have noted that Snowflake is more flexible, affordable and scalable than its competitors. Accordingly, it is clear that investors are on the same page with this analysis.
Strong second quarter earnings
As mentioned, Snowflake’s recent earnings were really quite strong. The company’s second-quarter earnings showed a three-digit revenue increase of $ 255 million. However, the company’s third-quarter earnings grew more than three-fold (104% vs. 103% in the previous quarter), reaching 2 272 million.
In other words, the company is not only blowing up earnings expectations, it is accelerating its earnings over time. This is very impressive.
Analysts have forecast strong revenue growth, but nothing on this scale. From a top line perspective, Snow Stock deserves a gold star to earn.
However, this increase has come at a price. Snowflakes are still not profitable, and have missed the bottom line in the past. This past quarter, the company lost 64 0.64 per share, versus analyst estimates of $ 0.15 per share. While this is not good, it is expected that higher revenue growth will be good for this company in the long run with the increase in market share.
Investors are not buying this stock because it is profitable today. Rather, they are banking on snowflakes that are able to capture more markets over time.
Analysts on snow stocks
TipRanks’s analyst rating suggests that Snowflake bought a moderate. There are 9 recommendations and 10 recommendations out of 19 ratings.
The average snowflake price target is $ 317.80. Analyst price targets range from a low of $ 275 per share to a high of $ 375 per share.
The last row
Looking at the numbers, Snow Stock is one that is certainly interesting. While the company remains a hyper-growth stock, and is blowing up its top-line expectations, investors are likely to demand a path to profit soon. In this kind of scenario, some negative aspects can be implemented.
However, as long as the market maintains dynamism and investors value growth on earnings, it is a stock that has the potential to do well. This kind of growth rate is hard to find in the market today. Accordingly, Snowflake is a stock that is one of the top growth options for investors at the moment and for growth.
Disclosure: At the time of publication, Chris MacDonald had no position on the securities mentioned in this article.
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