Snowflake stock drops 20% in 2024 despite strong earnings, leading to concerns about growth and valuation.

From Nasdaq: 2024-05-29 05:20:00

Snowflake (NYSE: SNOW) reported strong earnings in Q1 fiscal 2025, with revenue up 33% year over year to $829 million, but net income dipped. The stock dropped over 20% this year due to geopolitical tensions and macro headwinds, prompting concerns about its growth and valuation. Analysts question if Snowflake can maintain its growth trajectory.

Large organizations struggle with data fragmentation, making it hard to access information for data-driven decisions. Snowflake’s cloud-based data warehousing solution offers flexibility across different platforms, unlike competitors like AWS and Azure. Its product revenue surged in fiscal 2021 and 2022, but growth rates have slowed recently causing investor concern.

Snowflake’s CEO resignation, slowing growth rates, declining revenue retention, flattening margins, and expensive valuations are red flags for investors. The company is still growing, but its fundamentals and slowing growth make it a risky investment at this time. Analysts do not see the recent pullback as a buying opportunity for Snowflake stock, urging caution among investors.



Read more at Nasdaq: Down 20% in 2024: Is Snowflake’s Stock Still Worth Buying?