Snowflake Looks Attractively Priced After Q2 Report
Aug 23, 2024
Snowflake, our data storage and compute provider, reported what I thought was a solid Q2, with revenues up 29% and good cash profitability metrics. Net retention was 127%, roughly in line with Q1. The firm grew backlog 48% and customers over $1 million expanded to 510. Forward guidance for the year was on target. Operationally, things are progressing fine. I realized that I never updated the stock for the departure of CEO Frank Slootman back in March. Snowflake is now led by former AI chief Sridhar Ramaswamy, who only joined the firm a little over a year ago (via the Neeva acquisition). That makes leadership more of a wildcard than we initially projected. I'm holding the line on Snowflake's fair value price at $140. The stock looks decently cheap right now.
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