The last few weeks have seen a couple of crazy levels of valuations for IPOs, tech in particular (of course).
You all probably know that the original offering that is minions do not have the privilege of being involved in started trading at 120 PS. Unfortunately by the time it reached us it was way past the 200 PS levels.
Just looking at there SEC filing they posted $240million in revenue, strong growth moving forward, great NRR, I’m unsure of the TAM if anyone could point me in the right direction to save the long read?
The SEC filing also highlights the cash position being low and large losses which are expected for a high growth company.
The competition is obvious with the likes of Azure etc in that space. I also believe snowflake actually use the cloud space of there competitors which may prove troublesome.
Getting to the point I do think they’re an interesting business, but at what price do you think is sensible? How an earth do you value this?
I appreciate we are in a world of crazy valuations but this valuation does seem crazy, almost as if the growth for however many years is priced in already.
Most of the overhyped tech IPOs have had some sort of pull back, I’m waiting for this before I jump in…if it doesn’t happen then I’ll wait till December.
oh yeah I know the market is comparing Snowflake to MFST Azure and other cloud stocks but that only tells 50% of the story imo, I understand they make this comparison for people who don’t fully understand the technology. Snowflake is more similar to Amazons Redshift or MSFT SQL Server the comparable stock would be NASDAQ: MDB. I’m not sure if they disclosed where their revenue comes from in their fillings but from my experience using the software most of your credits (money) is spent on computing cost (used to aggregate and extract data) rather than data storage.
One area snowflake I think snowflake has an advantage is their data marketplace, if you believe data is new/future Gold, think of this as Amazon for data where company A is able to generate revenue by selling it’s data to company B via Snowflake.
I’m with you on that, I’m very much in sit back mode right now on snowflake.
That’s interesting on the December point, hopefully it’ll be an early Christmas present!
My concern wasn’t really a comparable as of yet, it was more that they rent cloud space from elsewhere, from azure etc. I guess there is always a risk that the big boys will come in to play with there particular niche.
It’s just trying to figure out the right price!
I’m keeping an eye on palantir tomorrow to see how that plays, should be pretty interesting.
I think you can go wrong with Tesla. They have had a fast start but I work in the industry and it is well known that Tesla paintwork is absolutely appalling (they released a paint fix kit recently) plus the others are now catching up. VW has the largest infrastructure in terms of dealerships throughout the world. They are going head into EV now for all their brands ie SEAT, Skida, VW, Audi, Bentley etc - they have made one single platform specifically for EV’s and this will keep their costs down per brand that they own. Watch them. NIO is also interesting - good cars in terms of launching SUV’s in EV plus I think the Chinese Govt will continue to support this company as a challenger to TESLA. TESLA need more models, even Peugeot have launched some decent priced smaller EV’s which TESLA dont do. Ultimatley I think TESLA will make batteries for competitors - I know they are huge into solar whihc will be great for them too, but I think their share price has risen too high too quickly. They have the head start but the competition ain’t going to lie down and take it.
@Rygel@Paul252526 please refrain from needlessly polluting every topic with Tesla…
@Jobloggs wast majority of IPOs historically follow a cup with handle or double bottom pattern. There are rare exceptions for this but I will wait until it breaks base in any case. First day trades hit a high of 319 somethings,
thats a million dollar question normally people use highest volume weighted hours maximum price. For snowflake this is 319. which is on a normal day super high for an IPO. But for this last year it is really difficult to judge and reason with tech stocks.
another million dollar question, is it worth it? I highly doubt it, I would not buy it for more than 130-140 levels. Like @kingola2nd mentioned. I am shocked watching wall street comparing snowflake to google cloud, azure and aws where in reality snowflake offers just fraction of those cloud platforms. It only has a (somewhat) different approach for data storage and some querying. Something AWS(or google) can implement in months if they wanted to (questionable if needed tho.)
So again in my personal opinion, this was a good promising stock for the initial 60-80, acceptable with a possible upside at 120-150s. I highly doubt it at current 250+ levels. Then again personal view
most IPOs do actually. It depends on the “hype” and “fomo” around the stock or industry at the time of the IPO. Cronos IPO during “cannabis” hype lasted years for example, big ones with big pull backs i can remember are alibaba, facebook snapchat etc.
In most cases if the stock is going to appreciate it really does not matter if you bought in at 3rd week or 3rd month really. Can’t remember the exact values but FB ipo’d at around $25ish? and 6-7 months into its float it started an upward trend and reached $40 levels. Yes it’d have been lovely if you caught that all time low of $15 (<- made up number) but I would not be sad, if i waited for the break and bought at $40.
on the other hand:
when royal mail did its IPO at 330p on the first day it hit 450p and there was a government inquiry about a “possible wrongdoing because royal mail was sold too cheap” Royal mail is 230p at the moment and fell as low as 120p in April.
In conclusion, “if an outcome is hypothetically possible, there is an example of that happening in history”
The problem with Snowflake and other tech companies is that they are not really unique in their offering. Apart from the large established players with bags of endless cash for R&D , the smaller ones are risky. Like how do they compete with the big players. They don’t have the wide footprint or scale yet to justify price. Even going forward a few years its hard to see when their price makes sense.
With any tech IPO, your taking a bet that not only will the products on offer land in the market at scale, but also that the company can manage their margins as they scale.
IPO’s themselves are a speculators playground. It’s like getting on the bus to jump off at the top to make a quick buck.
TSLA is also an example. Trading at 900x or so, yet once the EV thing really kicks off, every other car manufacturer are there ready to go. Toyota/Lexus, BMW, Mercedes etc, already have established economies of scale and have the ability to grind margins that Tesla perhaps couldn’t match. Not saying its not gonna happen, but my point is for a stock trading at 900x, the risk is just nuts.
It’s a great company but just an incredibly expensive stock that came from the hot IPO market last year that may be cooking down.
It’s revenue for the last 12 months is around 600million with a 55odd billion market cap. It’s worth paying a premium I would say, but how much of a premium, god knows.
One on my watchlist and if I knew the bottom I’d be a bit richer.
normally people use highest volume weighted hours maximum price. For snowflake this is 319. which is on a normal day super high for an IPO. But for this last year it is really difficult to judge and reason with tech stocks.
