Snowflake (SNOW) Stock | Long Term Analysis | Overvalued or Undervalued |

All right hello and welcome everybody to other stock announcement where today we’ll be talking about snowflake ticker symbol snow now this company is trade on the nasdaq currently and this is a stock that i have been looking to talk about for quite some time as it is a company that buff is backed quite significantly with a large portion of the stock being owned by bircher hathaway so this is something that i found to be very fascinating and so i won’t compare this to some other competitors like amazon so aws and also microsoft services and other things like that so we’re going to do this video is talk about whether the company is currently overvalued or under bad and then i want to give you a long term announcement on this company so you could decide for yourself whether you’d be just investing in holding this company or not i also want to talk about how this company works and how it generates most of its revenue anyway thank you so much for watching if you like this video please do like subscribe this is our channel and let’s get this content out to more people some more people can understand how snowflake works and also other stocks that we talk about work as well on our channel anyway thank you so much for watching without further ado let’s get started so what i did when i first saw this company is i wanted to look on their website what you can do is you can go to their about page and you can look at their actual what seems to be a polar bear if you click on like what i did you can also notice that the company essentially gives you four main options now you can see the company also talks about one particular option here which is you know if you’re learning about what they actually do and essentially just to sum things up this is a data storage and company so they store approximately 250 petabytes of data if not more which is a ton of data so what you can do is this company will store large portions of data for you so if you own a company that needs to store lots of data then you may go to one of these companies who will just manage your data for you so they’ll have a lot of servers they’ll have a lot of storage et cetera and they call this their data cloud or their snowflake data cloud as they have it listed here what their main competitors at this point i would consider to be amazon web services which is aws for short this is a essential business that a lot of people need ibm of course has their ibm cloud that also competes heavily with this business too but it seems like amazon right now is currently holding the top spot in that service now it’s hard to say which one’s better i don’t know enough about that kind of space so i’m not going to claim that it’s any better or amazon web server saying barrack sarah the real point is that snowflake is offering a competitive service in an already competitive business a lot of people offer these kind of services already so it’s hard for snowflake to really compete with amazon as a lot of people already know that name so just keep that in mind if you’re thinking about investing in this company as they already are invested in a pretty big and competitive industry now other companies like ibm have been doing this for numerous years and so other people might say well why would they move their data from ibm over to snowflake and you’re right they really likely won’t just because the fact that it’s so difficult to move large portions of data like petabytes into a totally different entity so a lot of people will just stay with ibm and just keep their money in there just for the long term because they have no real reason to move it now i do want to keep speculation to a low and this is where value analysis comes into play so we can see that the company currently has a book value of about 17 a share or 16.77 cents as of july that is very very low relative to the current trade price of the stock it’s actually really a very high price to buck at this point you can see that the highest priced book for this company was about 22 the lowest was about 12 and the company currently has a median price to book of about 15. now anything higher than like maybe three or four for kind of a data service company like this can be a bit concerning now this is very high because this although we consider it to be a tech company they are still just storing data at this point so i believe that the company should trade more closer to their assets however that is now the market is currently portraying them ibm does seem to trade closer to their assets compared to snowflake so that is a bit concerning for me now financially i do see this company as being pretty okay they do have some debt even though it says they have about 195 million dollars or 194.9 million dollars worth of debt that is not too concerning for me as they have about four billion dollars worth of cash so they can pay off this debt the more the real purpose of having this debt is just to allow them to grow their business so i would not be concerned about their day at this point i don’t consider this company going to be going bankrupt anytime soon however this company is currently losing lots of money we can see that the company currently has a net income of about negative 540 million dollars over the 2021 year now this is a significant loss of money so that four billion dollars in cash if it goes down like this every year that can be very concerning now even though the company’s management does believe that their customers will generate more income later on and more annual revenue um i still just can’t say that that’s going to happen because this is speculation it’s very important that we know that the company’s income is still negative so this company is not profitable at this point they were not profitable the year before or the year before that and they are still not profitable even today now this company could be profitable later on and if they do change then i will likely make a new video in order to talk about what goes on with that however at this point this company is still not profitable and therefore the company shouldn’t be necessarily considered a very good value investment because price earnings is currently non-existent it would be zero or negative or however you’d want to call it so therefore the price earnings being zero and the company having a very low book value wouldn’t be would make the stock a very good value investment from me now to be honest i do think a lot of people understand that already that you’re buying the stock for the growth of it however there are already a lot of good companies that are already in the space like amazon and ibm and other companies like that so i don’t see too much of a reason to be throwing a lot of money at this stock when there’s other stocks that seems to be doing very well in the same field and those other companies i’ve also realized profit from doing this service so i do think that that’s very important to note that this company even though you could take some risk and maybe make some money this company already having a market cap of about 90 billion dollars still makes the company does make the company seem a bit overvalued in my opinion this company has also been issuing more shares and this is because the stock seems to be trading pretty high at least that’s why i think i think the reason why companies issue shares at these high valuations is that they can retain some cash like they’re doing right now and then if the company’s stock drops they can maybe start to buy back their own stock or they can use that money to try to reinvest in the company etc so when the company issues more shares it tends to be that the company is actually trying to take advantage of their high trading value because it’s technically not good for the shareholders when the company issues more shares it dilutes the market and the problem with that is now there’s more shares outstanding so the assets of the company are distributed across more shares and more shareholders so therefore the company is going to be worth less per share than what it was before because the asset value has decreased per share and also this company hasn’t realized any net profit or net income so therefore the company is not able to pay a demand to you so that’s expected but i just wanted to point out that this company does not pay a dividend it issues more shares the company’s income is still negative at this point the company seems to be certainly not a value stock in my opinion now this could be a very good growth stock um if you’re trying to trade the stock maybe in terms of day trading or doing something a little more fancy now i do see this company as being inflation protected as they could raise costs if they need to alongside other companies that may need to as well so i do see this company as being okay with that it may not be as inflation protected as maybe coca-cola or other things like that but i see this company that they could work with their price if they needed to now i really do want to hear what you have to say about this stock in the comment section below because this company seems to be more of an up-and-coming company compared to like ibm and amazon that been around and doing these services for many years so keep that in mind as this companies may be able to take over those companies in that field however with the company already trading relatively high compared to its asset value and compared to earnings frankly and all that kind of stuff this company really just doesn’t make me want to put any money in this stock when i could just buy another stock that may do very well that already has net income now like i’ve said many times i am not a financial advisor this is not financial advice please do your own research for investing anyway thank you so much for watching if you liked this video please do like subscribe it’s about our channel and please comment down below and tell us if you think about this company we’ll try to get back to you anyway thanks again for watching don’t forget everybody