Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play

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Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play

seekingalpha2021-06-21

Summary Snowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S. To entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing...

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Salil2kool
·2021-06-21
??
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lavin
·2021-06-21
Ok
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semsem
·2021-06-21
?
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BiErGaiShi
·2021-06-21
Agree that snowflake is a good stock. Hope it will start running...
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All_blacks
·2021-06-21
For the future but looks overvalued at the moment
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5
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RS142
·2021-06-21
Nice article
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Seuna
·2021-06-21
Like and comment please
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- xxhuiminxx:
  Cool
  2021-06-24
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- Xiaojb07:
  ok
  2021-06-21
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- TeikLeong:
  done
  2021-06-21
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Knic
·2021-06-21
Comment and win!
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- Huathk:
  Gd
  2021-06-21
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- Seuna:
  Like and comment please
  2021-06-21
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Holla
·2021-06-21
Like my comment pls
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- Pltretard:
  Done
  2021-06-21
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55ewell
·2021-06-21
???
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sy0n
·2021-06-21
FOLLOW ME for DAILY LIKES for ALL YOUR MISSIONS!
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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSnowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-21 15:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing...\n\n<a href=\"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SNOW","symbol_name":"Snowflake","start_time":0,"source_url":"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play","article_id":"1132721323","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1132721323","pubTimestamp":1624262203,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"SNOW":"Snowflake"},"translate_title":"雪花：制定雄心勃勃的2028年收入指导，但令人信服的云玩法","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SNOW":0.9},"content_text":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.\nThe cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.\nHence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.\nThis implies Snowflake is a market-beating stock.\n\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for >30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of >$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s >$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a >30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","kind":"news","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":120019782,"gmtCreate":1624287809846,"gmtModify":1703832606269,"author":{"id":"4087358325357760","authorId":"4087358325357760","name":"Salil2kool","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"4087358325357760","authorIdStr":"4087358325357760"},"htmlText":"??","listText":"??","text":"??","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/120019782","repostId":1132721323,"repostType":4,"repost":{"id":"1132721323","kind":"news","pubTimestamp":1624262203,"share":"https://ttm.financial/m/news/1132721323?lang=&edition=fundamental","pubTime":"2021-06-21 15:56","market":"us","language":"en","title":"Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play","url":"https://stock-news.laohu8.com/highlight/detail?id=1132721323","media":"seekingalpha","summary":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x","content":"Summary\n<ul>\n <li>Snowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.</li>\n <li>To entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.</li>\n <li>The cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.</li>\n <li>Hence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.</li>\n <li>This implies Snowflake is a market-beating stock.</li>\n</ul>\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n<img src=\"https://static.tigerbbs.com/6583773b57852af9f1995dc94cc7ca51\" tg-width=\"640\" tg-height=\"327\" referrerpolicy=\"no-referrer\">\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for &gt;30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of &gt;$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s &gt;$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a &gt;30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSnowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-21 15:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing...\n\n<a href=\"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNOW":"Snowflake"},"source_url":"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1132721323","content_text":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.\nThe cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.\nHence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.\nThis implies Snowflake is a market-beating stock.\n\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for >30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of >$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s >$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a >30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":167568884,"gmtCreate":1624278161048,"gmtModify":1703832212671,"author":{"id":"3574887882529371","authorId":"3574887882529371","name":"lavin","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3574887882529371","authorIdStr":"3574887882529371"},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/167568884","repostId":1132721323,"repostType":4,"repost":{"id":"1132721323","kind":"news","pubTimestamp":1624262203,"share":"https://ttm.financial/m/news/1132721323?lang=&edition=fundamental","pubTime":"2021-06-21 15:56","market":"us","language":"en","title":"Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play","url":"https://stock-news.laohu8.com/highlight/detail?id=1132721323","media":"seekingalpha","summary":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x","content":"Summary\n<ul>\n <li>Snowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.</li>\n <li>To entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.</li>\n <li>The cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.</li>\n <li>Hence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.</li>\n <li>This implies Snowflake is a market-beating stock.</li>\n</ul>\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n<img src=\"https://static.tigerbbs.com/6583773b57852af9f1995dc94cc7ca51\" tg-width=\"640\" tg-height=\"327\" referrerpolicy=\"no-referrer\">\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for &gt;30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of &gt;$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s &gt;$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a &gt;30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSnowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-21 15:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing...\n\n<a href=\"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNOW":"Snowflake"},"source_url":"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1132721323","content_text":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.\nThe cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.\nHence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.\nThis implies Snowflake is a market-beating stock.\n\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for >30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of >$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s >$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a >30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":167679850,"gmtCreate":1624267661870,"gmtModify":1703831981689,"author":{"id":"3582710052830337","authorId":"3582710052830337","name":"semsem","avatar":"https://static.tigerbbs.com/5b9f05e7dbe5d400cc4455ee79b32617","vip":1,"crmLevel":2,"crmLevelSwitch":1,"idStr":"3582710052830337","authorIdStr":"3582710052830337"},"htmlText":"?","listText":"?","text":"?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/167679850","repostId":1132721323,"repostType":4,"repost":{"id":"1132721323","kind":"news","pubTimestamp":1624262203,"share":"https://ttm.financial/m/news/1132721323?lang=&edition=fundamental","pubTime":"2021-06-21 15:56","market":"us","language":"en","title":"Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play","url":"https://stock-news.laohu8.com/highlight/detail?id=1132721323","media":"seekingalpha","summary":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x","content":"Summary\n<ul>\n <li>Snowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.</li>\n <li>To entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.</li>\n <li>The cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.</li>\n <li>Hence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.</li>\n <li>This implies Snowflake is a market-beating stock.</li>\n</ul>\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n<img src=\"https://static.tigerbbs.com/6583773b57852af9f1995dc94cc7ca51\" tg-width=\"640\" tg-height=\"327\" referrerpolicy=\"no-referrer\">\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for &gt;30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of &gt;$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s &gt;$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a &gt;30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSnowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-21 15:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing...\n\n<a href=\"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNOW":"Snowflake"},"source_url":"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1132721323","content_text":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.\nThe cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.\nHence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.\nThis implies Snowflake is a market-beating stock.\n\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for >30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of >$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s >$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a >30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":167628262,"gmtCreate":1624266469156,"gmtModify":1703831948830,"author":{"id":"3530266091749222","authorId":"3530266091749222","name":"BiErGaiShi","avatar":"https://static.tigerbbs.com/a6fe5dbcb2f892246515b13cb7c68a10","vip":1,"crmLevel":3,"crmLevelSwitch":0,"idStr":"3530266091749222","authorIdStr":"3530266091749222"},"htmlText":"Agree that snowflake is a good stock. Hope it will start running...","listText":"Agree that snowflake is a good stock. Hope it will start running...","text":"Agree that snowflake is a good stock. Hope it will start running...","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/167628262","repostId":1132721323,"repostType":4,"repost":{"id":"1132721323","kind":"news","pubTimestamp":1624262203,"share":"https://ttm.financial/m/news/1132721323?lang=&edition=fundamental","pubTime":"2021-06-21 15:56","market":"us","language":"en","title":"Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play","url":"https://stock-news.laohu8.com/highlight/detail?id=1132721323","media":"seekingalpha","summary":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x","content":"Summary\n<ul>\n <li>Snowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.</li>\n <li>To entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.</li>\n <li>The cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.</li>\n <li>Hence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.</li>\n <li>This implies Snowflake is a market-beating stock.</li>\n</ul>\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n<img src=\"https://static.tigerbbs.com/6583773b57852af9f1995dc94cc7ca51\" tg-width=\"640\" tg-height=\"327\" referrerpolicy=\"no-referrer\">\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for &gt;30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of &gt;$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s &gt;$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a &gt;30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSnowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-21 15:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing...\n\n<a href=\"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNOW":"Snowflake"},"source_url":"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1132721323","content_text":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.\nThe cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.\nHence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.\nThis implies Snowflake is a market-beating stock.\n\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for >30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of >$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s >$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a >30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":167617127,"gmtCreate":1624264984669,"gmtModify":1703831912561,"author":{"id":"3554530344380803","authorId":"3554530344380803","name":"All_blacks","avatar":"https://static.tigerbbs.com/6f6aa26e75065ead19d6f3c7ba959fd2","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"3554530344380803","authorIdStr":"3554530344380803"},"htmlText":"For the future but looks overvalued at the moment","listText":"For the future but looks overvalued at the moment","text":"For the future but looks overvalued at the moment","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/167617127","repostId":1132721323,"repostType":4,"repost":{"id":"1132721323","kind":"news","pubTimestamp":1624262203,"share":"https://ttm.financial/m/news/1132721323?lang=&edition=fundamental","pubTime":"2021-06-21 15:56","market":"us","language":"en","title":"Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play","url":"https://stock-news.laohu8.com/highlight/detail?id=1132721323","media":"seekingalpha","summary":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x","content":"Summary\n<ul>\n <li>Snowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.</li>\n <li>To entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.</li>\n <li>The cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.</li>\n <li>Hence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.</li>\n <li>This implies Snowflake is a market-beating stock.</li>\n</ul>\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n<img src=\"https://static.tigerbbs.com/6583773b57852af9f1995dc94cc7ca51\" tg-width=\"640\" tg-height=\"327\" referrerpolicy=\"no-referrer\">\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for &gt;30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of &gt;$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s &gt;$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a &gt;30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSnowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-21 15:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing...\n\n<a href=\"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNOW":"Snowflake"},"source_url":"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1132721323","content_text":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.\nThe cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.\nHence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.\nThis implies Snowflake is a market-beating stock.\n\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for >30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of >$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s >$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a >30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":167615654,"gmtCreate":1624264896378,"gmtModify":1703831914199,"author":{"id":"3574118564601995","authorId":"3574118564601995","name":"RS142","avatar":"https://static.tigerbbs.com/22d2d9b1f352da24e6ea75b557ac987a","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3574118564601995","authorIdStr":"3574118564601995"},"htmlText":"Nice article","listText":"Nice article","text":"Nice article","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/167615654","repostId":1132721323,"repostType":4,"repost":{"id":"1132721323","kind":"news","pubTimestamp":1624262203,"share":"https://ttm.financial/m/news/1132721323?lang=&edition=fundamental","pubTime":"2021-06-21 15:56","market":"us","language":"en","title":"Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play","url":"https://stock-news.laohu8.com/highlight/detail?id=1132721323","media":"seekingalpha","summary":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x","content":"Summary\n<ul>\n <li>Snowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.</li>\n <li>To entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.</li>\n <li>The cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.</li>\n <li>Hence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.</li>\n <li>This implies Snowflake is a market-beating stock.</li>\n</ul>\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n<img src=\"https://static.tigerbbs.com/6583773b57852af9f1995dc94cc7ca51\" tg-width=\"640\" tg-height=\"327\" referrerpolicy=\"no-referrer\">\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for &gt;30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of &gt;$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s &gt;$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a &gt;30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSnowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-21 15:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing...\n\n<a href=\"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNOW":"Snowflake"},"source_url":"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1132721323","content_text":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.\nThe cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.\nHence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.\nThis implies Snowflake is a market-beating stock.\n\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for >30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of >$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s >$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a >30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":167695809,"gmtCreate":1624263762001,"gmtModify":1703831881604,"author":{"id":"3569227954325701","authorId":"3569227954325701","name":"Seuna","avatar":"https://static.tigerbbs.com/0bfb6c0f011a65d66aae3afb6132a82d","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3569227954325701","authorIdStr":"3569227954325701"},"htmlText":"Like and comment please","listText":"Like and comment please","text":"Like and comment please","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":7,"commentSize":4,"repostSize":0,"link":"https://ttm.financial/post/167695809","repostId":1132721323,"repostType":4,"repost":{"id":"1132721323","kind":"news","pubTimestamp":1624262203,"share":"https://ttm.financial/m/news/1132721323?lang=&edition=fundamental","pubTime":"2021-06-21 15:56","market":"us","language":"en","title":"Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play","url":"https://stock-news.laohu8.com/highlight/detail?id=1132721323","media":"seekingalpha","summary":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x","content":"Summary\n<ul>\n <li>Snowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.</li>\n <li>To entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.</li>\n <li>The cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.</li>\n <li>Hence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.</li>\n <li>This implies Snowflake is a market-beating stock.</li>\n</ul>\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n<img src=\"https://static.tigerbbs.com/6583773b57852af9f1995dc94cc7ca51\" tg-width=\"640\" tg-height=\"327\" referrerpolicy=\"no-referrer\">\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for &gt;30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of &gt;$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s &gt;$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a &gt;30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSnowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-21 15:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing...\n\n<a href=\"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNOW":"Snowflake"},"source_url":"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1132721323","content_text":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.\nThe cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.\nHence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.\nThis implies Snowflake is a market-beating stock.\n\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for >30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of >$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s >$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a >30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":4986438,"gmtCreate":1624498326840,"gmtModify":1663229866945,"authorId":3569387532014342,"author":{"id":3569387532014342,"idStr":"3569387532014342","authorId":3569387532014342,"name":"xxhuiminxx","avatar":"https://static.tigerbbs.com/67e3d0b0e12bc3c5e811a43b5b8ca8ef","vip":1,"crmLevel":3,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":167695809,"type":1,"supId":0,"prevId":0,"content":"Cool","text":"Cool","html":"Cool"},{"id":4929821,"gmtCreate":1624264003862,"gmtModify":1663229593532,"authorId":3555044358664058,"author":{"id":3555044358664058,"idStr":"3555044358664058","authorId":3555044358664058,"name":"Xiaojb07","avatar":"https://static.tigerbbs.com/78d1278d3e8a0f666e68318532f083d0","vip":1,"crmLevel":2,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":167695809,"type":1,"supId":4929769,"prevId":0,"content":"ok","text":"ok","html":"ok"},{"id":4929983,"gmtCreate":1624264374812,"gmtModify":1663229593344,"authorId":3581504913688063,"author":{"id":3581504913688063,"idStr":"3581504913688063","authorId":3581504913688063,"name":"TeikLeong","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":3,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":167695809,"type":1,"supId":0,"prevId":0,"content":"done","text":"done","html":"done"},{"id":4929769,"gmtCreate":1624263857120,"gmtModify":1663229592570,"authorId":3566449916340164,"author":{"id":3566449916340164,"idStr":"3566449916340164","authorId":3566449916340164,"name":"russ1122","avatar":"https://static.tigerbbs.com/410e5ecfb4da8e3f85caaaf9808925f2","vip":1,"currentWearingBadge":{"badgeId":"1026c425416b44e0aac28c11a0848493-3","templateUuid":"1026c425416b44e0aac28c11a0848493","name":" Tiger Idol","description":"Join the tiger community for 1500 days","bigImgUrl":"https://static.tigerbbs.com/8b40ae7da5bf081a1c84df14bf9e6367","smallImgUrl":"https://static.tigerbbs.com/f160eceddd7c284a8e1136557615cfad","grayImgUrl":"https://static.tigerbbs.com/11792805c468334a9b31c39f95a41c6a","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2024.12.05","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1001},"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":167695809,"type":1,"supId":0,"prevId":0,"content":"hi","text":"hi","html":"hi"}],"langContent":"EN"},{"id":167696292,"gmtCreate":1624263641016,"gmtModify":1703831879115,"author":{"id":"3575323038436346","authorId":"3575323038436346","name":"Knic","avatar":"https://static.tigerbbs.com/222b0b4ee65b121d0a213fe398888905","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"3575323038436346","authorIdStr":"3575323038436346"},"htmlText":"Comment and win!","listText":"Comment and win!","text":"Comment and win!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":7,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/167696292","repostId":1132721323,"repostType":4,"repost":{"id":"1132721323","kind":"news","pubTimestamp":1624262203,"share":"https://ttm.financial/m/news/1132721323?lang=&edition=fundamental","pubTime":"2021-06-21 15:56","market":"us","language":"en","title":"Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play","url":"https://stock-news.laohu8.com/highlight/detail?id=1132721323","media":"seekingalpha","summary":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x","content":"Summary\n<ul>\n <li>Snowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.</li>\n <li>To entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.</li>\n <li>The cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.</li>\n <li>Hence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.</li>\n <li>This implies Snowflake is a market-beating stock.</li>\n</ul>\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n<img src=\"https://static.tigerbbs.com/6583773b57852af9f1995dc94cc7ca51\" tg-width=\"640\" tg-height=\"327\" referrerpolicy=\"no-referrer\">\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for &gt;30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of &gt;$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s &gt;$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a &gt;30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSnowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-21 15:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing...\n\n<a href=\"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNOW":"Snowflake"},"source_url":"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1132721323","content_text":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.\nThe cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.\nHence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.\nThis implies Snowflake is a market-beating stock.\n\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for >30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of >$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s >$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a >30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":4929989,"gmtCreate":1624264427198,"gmtModify":1663229593028,"authorId":3573472992263411,"author":{"id":3573472992263411,"idStr":"3573472992263411","authorId":3573472992263411,"name":"Huathk","avatar":"https://static.tigerbbs.com/43c7168c646d9ea6805194ed0003f1cc","vip":1,"crmLevel":5,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":167696292,"type":1,"supId":4929739,"prevId":0,"content":"Gd","text":"Gd","html":"Gd"},{"id":4929739,"gmtCreate":1624263776296,"gmtModify":1663229590285,"authorId":3569227954325701,"author":{"id":3569227954325701,"idStr":"3569227954325701","authorId":3569227954325701,"name":"Seuna","avatar":"https://static.tigerbbs.com/0bfb6c0f011a65d66aae3afb6132a82d","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":167696292,"type":1,"supId":0,"prevId":0,"content":"Like and comment please","text":"Like and comment please","html":"Like and comment please"}],"langContent":"EN"},{"id":167600187,"gmtCreate":1624262852749,"gmtModify":1703831858738,"author":{"id":"3565687171198207","authorId":"3565687171198207","name":"Holla","avatar":"https://static.tigerbbs.com/c0b0e402ff8043410cc67ffccbfe2174","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3565687171198207","authorIdStr":"3565687171198207"},"htmlText":"Like my comment pls","listText":"Like my comment pls","text":"Like my comment pls","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/167600187","repostId":1132721323,"repostType":4,"repost":{"id":"1132721323","kind":"news","pubTimestamp":1624262203,"share":"https://ttm.financial/m/news/1132721323?lang=&edition=fundamental","pubTime":"2021-06-21 15:56","market":"us","language":"en","title":"Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play","url":"https://stock-news.laohu8.com/highlight/detail?id=1132721323","media":"seekingalpha","summary":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x","content":"Summary\n<ul>\n <li>Snowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.</li>\n <li>To entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.</li>\n <li>The cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.</li>\n <li>Hence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.</li>\n <li>This implies Snowflake is a market-beating stock.</li>\n</ul>\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n<img src=\"https://static.tigerbbs.com/6583773b57852af9f1995dc94cc7ca51\" tg-width=\"640\" tg-height=\"327\" referrerpolicy=\"no-referrer\">\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for &gt;30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of &gt;$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s &gt;$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a &gt;30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSnowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-21 15:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing...\n\n<a href=\"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNOW":"Snowflake"},"source_url":"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1132721323","content_text":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.\nThe cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.\nHence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.\nThis implies Snowflake is a market-beating stock.\n\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for >30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of >$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s >$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a >30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":4930076,"gmtCreate":1624264715636,"gmtModify":1635304614136,"authorId":3575710348995261,"author":{"id":3575710348995261,"idStr":"3575710348995261","authorId":3575710348995261,"name":"Pltretard","avatar":"https://static.tigerbbs.com/20d7e9e6ca27ec0b458dcd81b8f9909f","vip":1,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":167600187,"type":1,"supId":0,"prevId":0,"content":"Done","text":"Done","html":"Done"}],"langContent":"EN"},{"id":167877359,"gmtCreate":1624262796471,"gmtModify":1703831857124,"author":{"id":"3577272005829901","authorId":"3577272005829901","name":"55ewell","avatar":"https://static.tigerbbs.com/4f2825fcb45f23295bcb39c75c2548ad","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3577272005829901","authorIdStr":"3577272005829901"},"htmlText":"???","listText":"???","text":"???","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/167877359","repostId":1132721323,"repostType":4,"repost":{"id":"1132721323","kind":"news","pubTimestamp":1624262203,"share":"https://ttm.financial/m/news/1132721323?lang=&edition=fundamental","pubTime":"2021-06-21 15:56","market":"us","language":"en","title":"Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play","url":"https://stock-news.laohu8.com/highlight/detail?id=1132721323","media":"seekingalpha","summary":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x","content":"Summary\n<ul>\n <li>Snowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.</li>\n <li>To entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.</li>\n <li>The cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.</li>\n <li>Hence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.</li>\n <li>This implies Snowflake is a market-beating stock.</li>\n</ul>\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n<img src=\"https://static.tigerbbs.com/6583773b57852af9f1995dc94cc7ca51\" tg-width=\"640\" tg-height=\"327\" referrerpolicy=\"no-referrer\">\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for &gt;30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of &gt;$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s &gt;$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a &gt;30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSnowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-21 15:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing...\n\n<a href=\"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNOW":"Snowflake"},"source_url":"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1132721323","content_text":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.\nThe cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.\nHence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.\nThis implies Snowflake is a market-beating stock.\n\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for >30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of >$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s >$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a >30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":167871860,"gmtCreate":1624262501650,"gmtModify":1703831848999,"author":{"id":"3581551145777728","authorId":"3581551145777728","name":"sy0n","avatar":"https://static.tigerbbs.com/3e86d4ab414d26409f75886942c11698","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3581551145777728","authorIdStr":"3581551145777728"},"htmlText":"FOLLOW ME for DAILY LIKES&nbsp;for ALL YOUR MISSIONS!","listText":"FOLLOW ME for DAILY LIKES&nbsp;for ALL YOUR MISSIONS!","text":"FOLLOW ME for DAILY LIKES for ALL YOUR MISSIONS!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/167871860","repostId":1132721323,"repostType":4,"repost":{"id":"1132721323","kind":"news","pubTimestamp":1624262203,"share":"https://ttm.financial/m/news/1132721323?lang=&edition=fundamental","pubTime":"2021-06-21 15:56","market":"us","language":"en","title":"Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play","url":"https://stock-news.laohu8.com/highlight/detail?id=1132721323","media":"seekingalpha","summary":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x","content":"Summary\n<ul>\n <li>Snowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.</li>\n <li>To entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.</li>\n <li>The cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.</li>\n <li>Hence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.</li>\n <li>This implies Snowflake is a market-beating stock.</li>\n</ul>\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n<img src=\"https://static.tigerbbs.com/6583773b57852af9f1995dc94cc7ca51\" tg-width=\"640\" tg-height=\"327\" referrerpolicy=\"no-referrer\">\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for &gt;30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of &gt;$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s &gt;$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a &gt;30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Snowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSnowflake: Sets Ambitious 2028 Revenue Guidance But Compelling Cloud Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-21 15:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing...\n\n<a href=\"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNOW":"Snowflake"},"source_url":"https://seekingalpha.com/article/4435787-snowflake-ambitious-2028-revenue-guidance-compelling-cloud-play","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1132721323","content_text":"Summary\n\nSnowflake has been regarded as one of the most expensive stocks in the market given its 63x forward P/S.\nTo entice investors, Snowflake has initiated a 2028 guidance for $10B revenue, growing an astonishing 20-fold over that period.\nThe cloud opportunity is enormous. For comparison, even Amazon AWS is still growing at around 30% despite its over $50B run rate.\nHence, not only do I regard the forecast as reasonable, but one could also actually make the case that the stock is cheaper than Palantir, the most hyped growth stock on Seeking Alpha.\nThis implies Snowflake is a market-beating stock.\n\nInvestment Thesis\nArguably the cloud has been one of the biggest winners in the stock market in the last several years: plenty of SaaS companies have seen incredible growth and returns.\nHowever, when it comes to the underlying infrastructure and providers of those clouds, there arguably have been no real pure play investments. Amazon (AMZN) has grown from an e-commerce business, Microsoft (MSFT) was first a software and Windows company, and Google (GOOG)(NASDAQ:GOOGL)is still most known for its search and advertising business.\nTo that end, perhaps one of the most compelling cloud infrastructure plays has entered the public market last year: Snowflake (SNOW). The company is still in its earliest innings and has reported some of the highest metrics in the market. Every tech investor knows that not every company posts net retention figures of 168% and overall revenue growth in the triple digits.\nHowever, while Snowflake is a best-of-breed company being further propelled by the secular cloud and data tailwinds, the company has cost retail investors a just as premium valuation right out of the IPO gates. This led many to stay on the sidelines. To that end, to entice investors, Snowflake has pulled quite a remarkable rabbit out of its hat at its recent investor meeting, by forecasting 20x revenue growth by 2028.\nInvestor Day: Path to 20x Revenue\nWhile certainly many companies often provide long-term models for investors, Snowflake’s guidance for 2028 must probably be one of the furthest guides one will ever come across. What makes it even more impressive is obviously the magnitude of the growth forecast through this horizon. So let’s just provide the money shot right away.\n\nFor comparison, in recent quartersTwilio(TWLO) andTeladoc Health(TDOC) have guided for >30% growth through 2024, while Palantir (PLTR) has guided for a similar rate through 2025, which would amount to $4B in revenue.\nSnowflake’s guidance blows all of these out of the water. It suggests it could grow 20-fold by calendar 2028, both in revenue and its amount of >$1M customers. These customers should provide the majority of its growth. Snowflake also expects that it will still be growing at 30% at the end of this period.\nBut what to make out of this? First, I actually for no moment would be hesitant to doubt Snowflake’s ability to reach this target. Snowflake will highly likely surpass $250M revenue in its upcoming quarter, which means it would already be on a $1B run rate, which means it would have to grow “just” another 10x in seven years. That’s a CAGR of just below 40%. As mentioned previously, Snowflake’s net retention alone is over 160%, while the company has also been quite rapidly growing its customer count.\nThere is also a second reason that lends credence to this forecast: the fact that there are already multiple precedents for these kinds of long-term growth rates in this space. Even after racing past $10B inquarterlyrevenue, Amazon is still growing at around the 30% exit CAGR that Snowflake is guiding for. Azure even slightly re-accelerated its growth in the past several quarters, which remains at around 50%. Google Cloud is growing even faster.\nPalantir comparison and valuation\nClearly, cloud remains one of the hottest trends in tech, and COVID-19 has shown that there is still a large opportunity. If anything, it seems likely that Snowflake could reach its $10B target perhaps several years earlier. Let’s say Snowflake achieves this by 2025 and let’s compare this to Palantir, a company that has also been wildly popular among investors – even more so than Palantir. Even if Palantir reaches its own target a year ahead of schedule, it still seems likely that Snowflake would be 2x Palantir’s size around that time and also still have a faster growth rate.\nHow does this then translate into valuation? While both stocks have been quite volatile, Snowflake’s market cap is around $75B currently compared to $45B for Palantir. While obviously the error bars here in these multi-year forecasts are enormous, given the sheer magnitude of Snowflake’s growth, this comparison actually shows that the valuation between these companies actually isn’t all that different.\nBut if Snowflake \"soon\" has 2x Palantir's revenue with a higher growth rate to boot, then surely it should have at least 2x Palantir's valuation. Given the market caps provided above, that means there could be about 20% upside in Snowflake right away.\nYes, Snowflake trades at a scary (certainly to value investors) 64x P/S. But such is the nature of exponential growth. For example, several decades ago chips had just thousands of transistors. Due to Moore’s Law, today chips have billions or even tens of billions of transistors.\nAs discussed, I have little reason to doubt Snowflake’s ability to continue to grow as such, and the 2028 guidance only adds fuel to the fire. So to that end, if anything, one could actually make just as valid an argument that not Palantir, but actually Snowflake is the cheaper stock between the two: those exceptional growth rates will cause even the highest multiples like Snowflake's 64x to decay exponentially (even if Palantir for its part doesn't slow down either).\nIts current $1B run rate as discussed pales in comparison to the likes of AWS. While certainly, these clouds have their own alternative offerings that compete against Snowflake, asdiscussed in my previous Snowflake coverage, Snowflake is a leader in its segment with several differentiated features, and should also benefit from the more recent trend of multi-cloud deployments.\nFurther notes\nAs mentioned, the secular trend underpinning Snowflake’s growth is the cloud (infrastructure). According to Snowflake’s provided estimates, cloud spending was a bit over $100B in 2020, and is forecasted to grow to over $350B by 2025. From that view, Snowflake’s share of that overall market still wouldn’t be all that significant. Snowflake estimates its 2021 TAM at $90B.\nAs the provided slide above indicated, Snowflake expects to generate $5.5B on average from its over $1M customers. For comparison, currently Snowflake generates just under $1M from its Fortune 500 customers. Currently, these customers actually just account for 25% of Snowflake’s >$1M customers. Snowflake’s long-term model also expects some further gross margin improvement, from 69% to 75%.\nPalantir\nMy analysis and rough valuation showed that Snowflake seems undervalued at less than double Palantir's valuation. Some might say that actually both are overvalued, but Palantir for its part also has quite compelling growth prospects.\nAs case in point, a while agoanother contributor did the same comparison, and the author's analysis concluded that Palantir would be the better buy. For example, Palantir's growth prospects can be seen by its relatively fewer number of customers, which indicates that Palantir, just like Snowflake, still has a large (perhaps even greenfield) opportunity.\nInvestor Takeaway\nSnowflake’s valuation makes little sense to an investor who would just read its most recent report. So to that end, Snowflake used its recent Investor Day to provide a really long-term outlook: 20x growth to $10B revenue by 2028. This target can’t be called anything less than ambitious, but in this article I actually made the case, or at least provided some arguments, that this goal should not just be realistic, but might actually be reached much earlier. In a comparison, I then showed that (surprisingly) not Palantir, as one of the most popular growth stocks, but actually Snowflake might be the cheaper stock.\nIn any case, the math for shareholder returns shouldn’t be too hard, and for all the ado that has been made (and continues to be made) about Snowflake’s valuation, it actually looks quite reasonable. Taking the $10B revenue by 2028 as base case, and assigning a 20x P/S multiple (which certainly isn’t exceptional for a >30% growth company with high margins), then Snowflake’s valuation could well exceed $200B. For simplicity, if Snowflake becomes a three-bagger from its current valuation by 2028, then that would be a market-beating 17% CAGR.\nIn summary, despite the seemingly exceptional valuation, I showed that one might well be able to beat the market by investing in Snowflake. Comparisons with AWS, Azure of GCP certainly aren’t overblown in my view, and as a pure-play cloud company (with no legacy e-commerce, advertising, etc. businesses) could or should hence be regarded as one of the most compelling cloud plays.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":79,"commentSize":11,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}