Let’s talk about the popular Snowflake Inc. (NYSE:SNOW). The company’s shares saw significant share price movement during recent months on the NYSE, rising to highs of US$277 and falling to the lows of US$206. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Snowflake’s current trading price of US$208 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Snowflake’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
The stock is currently trading at US$208 on the share market, which means it is overvalued by 36% compared to our intrinsic value of $152.43. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Since Snowflake’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Check out our latest analysis for Snowflake
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to grow by 23% over the next couple of years, the future seems bright for Snowflake. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
Are you a shareholder? SNOW’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe SNOW should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on SNOW for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for SNOW, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
