Although the major stock indices shrugged off concerns over the Evergrande debt crisis, the market should remain volatile as the Fed looks to taper, case counts remain stubbornly high, and the economy is decelerating.
Along with a low-interest-rate environment, the rising demand for technology products and solutions amid ongoing digitalization and continued innovations should keep driving the sector’s growth. Tech spending in the US is expected to grow 6.7% in 2022.
However, a bullish backdrop has led to certain tech stocks reaching price levels way beyond their intrinsic values. Considering the fundamentals and growth prospects, tech stocks Snowflake Inc. (SNOW – Get Rating), Cloudflare, Inc. (NET – Get Rating), Carvana Co. (CVNA – Get Rating), and Bill.com Holdings, Inc. (BILL – Get Rating) look way too expensive at their current price levels. So, these stocks could witness a pullback amid the market volatility.
SNOW provides a cloud-based data platform that enables customers worldwide to consolidate data into a single source to drive business insights, build data-driven applications and share data. Its platform enables the creation of its private data exchange to share and collaborate with business partners, suppliers, and employees in a centrally managed data hub.
On September 22, 2021, SNOW and Citigroup Inc. (SNOW – Get Rating) announced a strategic initiative to re-imagine how data flows across financial services transactions to provide a frictionless solution for post-trade processes across the industry. SNOW’s Financial
Services Data Cloud will help C securely share and access data to help launch new customer-centric products and services, build fintech platforms of the future, and satisfy regulatory compliance requirements.
SNOW’s non-GAAP operating loss decreased 62.4% from the prior-year period to $21.90 million for the fiscal second quarter ended July 31, 2021. The company’s net loss came in at $189.72 million, down 144.4% from the prior year period. Its loss per share came in at $0.64 for the quarter, indicating a 104.7% year-over-year decline. SNOW had cash and cash equivalents of $698.55 million as of July 31, 2021, representing a 14.8% decline from the fiscal 2021 fourth quarter ended January 31, 2020.
Analysts expect SNOW’s EPS to remain negative in the upcoming quarters of the current year and next year. The stock’s EPS is expected to decline at a marginal rate per annum over the next five years. Over the past nine months, it has fallen 7.6% in price to close yesterday’s trading session at $321.50.
In terms of forward EV/Sales, SNOW is currently trading at 78.21x, which is 2336.2% higher than the 4.32x industry average. In terms of forward Price/Sales, SNOW is currently trading at 82.70x, 1938.7% higher than the industry average of 4.06x.
SNOW’s weak prospects are reflected in its POWR Ratings. The stock has an overall rating of D, which equates to Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
SNOW has an F grade for Value and a D grade for Stability and Quality. In the 72-stock D-rated Technology – Services industry, it is ranked #68.
To see additional POWR Ratings for SNOW’s Growth, Sentiment, and Momentum, click here.
NET operates a cloud platform that delivers a range of network services to various industries and governments worldwide. The company provides businesses a unified control plane to provide security, performance, and reliability across their on-premise, hybrid, cloud, and Software-as-a-Service (SaaS) applications.
On September 22, 2021, NET joined the Microsoft Corporation’s (MSFT) Microsoft Intelligent Security Association (MISA), an ecosystem of independent software vendors and managed security service providers that have integrated with…
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