SNOWFLAKE ($SNOW) longNote:
- NYSE:SNOW
- High Tight Flag
- Hot sector
- Chart setting up nicely
- EMAs coming together
- Fundamentals are great
Disclaimer and Info:
- No guarantee for the correctness of information or calculations
- No advice or investment advice
- Fiscal Year ends January 31.
- All numbers in '000 US dollars (1.234 = 1.23 million USD)
Company profile from TradingView:
Snowflake, Inc. provides cloud data warehousing software.
It provides SQL data warehouse, zero management, and broad ecosystem products.
It offers data warehouse modernization, accelerating analytics, enabling developers and monitoring and security analysis solutions to federal government, financial services, healthcare, media and entertainment, retail and CPG , gaming, education and technology industries.
The company was founded by Marcin Zukowski, Thierry Cruanes and Benoit Dageville in 2013 and is headquartered in Bozeman, MT.
Main sources for data:
- Investor Presentation 3Q Fiscal 2022
- Trading View
- Own calculations
Customers (customers >$1M):
FY2021Q3: 3,554 (65)
FY2021Q4: 4,139 (77)
FY2022Q1: 4,532 (104)
FY2022Q2: 4,990 (116)
FY2022Q3: 5,416 (148) --> YOY Growth: 52% all customers // 128 % customers >$1M
Net Revenue Retention (NRR):
Net Revenue Retention (NRR) also known as Net Dollar Retention (NDR) is an important SaaS metric. NRR is one of the most important key KPIs from the software and service industry. Ultimately, it measures how much of the previous year's turnover was lost through layoffs and how much Annual Recurring Revenue ( ARR ) was gained through account expansion of existing SaaS-customers. The net effect of lost sales (revenue churn) and additional sales from received customers (account expansion) is the Net Revenue Retention.
In order to calculate the NRR, you need at least two comparison periods for the company. Typically, one compares the ARR of the previous year with the current value of the Annual Recurring Revenue. If the additional expenses of the existing customers can more than compensate for the loss of sales through terminations, one speaks of net-negative revenue churn or positive net revenue retention, which then takes a value of over 100%.
Calculation of the Net Revenue Retention (NRR) or Net Dollar Retention (NDR): Expressed mathematically, the NRR or NDR is the percentage of sales in a previous period or base period that could be realized in the current period. This includes additional sales from existing customers, cost reductions for customers and terminations. The net revenue retention rate can also assume values below 100%, which means that the customer cohort of the previous year spent less on average in the current year.
The goal of most SaaS-companies is therefore a net dollar retention of over 100, which would mean that the additional sales of existing customers could overcompensate for losses due to terminations (account churn) and budget cuts (revenue churn). If the NRR is above 100, i.e. the customer cohorts are spending more and more money and new customers can be won at the same time, software companies can grow particularly dynamically.
FY2022Q1: 168%
FY2022Q2: 170%
FY2022Q3: 173%
Non-GAAP Product Gross Margin:
FY19: 58%
FY20: 63%
FY21: 69%
FY22: 74% (est.)
FY2021Q3: 70%
FY2021Q4: 70%
FY2022Q1: 72%
FY2022Q2: 74%
FY2022Q3: 75%
Rule of "40":
The "Rule of 40" ( aka . "Rule of Forty") is one of the simplest and most important SaaS and software metrics. This KPI was developed by the US-based software venture capital fund Bessemer Venture Partners.
It tries to relate the growth and profitability of a company. The revenue growth and the free cash flow margin (also (non-GAAP) operating margin or adjusted EBITDA margin) are added as a measure of profitability. If the sum of the two values results in a value greater than 40 , empirical data are used to assume that this is a very healthy company. The rule of 40 is particularly meaningful for software or subscription companies with high gross margins.
The background to the relationship is that a company that is growing rapidly but is still losing money can be just as attractive or even more attractive than a company that is profitable but only grows more slowly. In addition, companies can often actively decide whether they want to give up profitability in order to grow even faster or save marketing costs and instead accept slow growth but deliver more EBIT .
At the same time, a situation in which a company is neither profitable nor grows significantly faster than 20% can quickly become threatening. Often these companies do not achieve sufficient economies of scale and operating leverage to be profitable and sustainable in the long term.
Therefore, the following applies quite casually: Either grow quickly or make a profit! If both of these don't work, the company often find itself in a dead end.
FY2021Q3: 88%
FY2021Q4: 93%
FY2022Q1: 95%
FY2022Q2: 96%
FY2022Q3: 112%
Sales Efficiency (aka Magic Number):
The "Magic Number" is a KPI of the sales efficiency of SaaS and subscription companies. It goes back to the venture capital fund Bessemer Venture Partners, which specializes in SaaS companies in the US.
To calculate the Magic Number, the newly acquired Annual Recurring Revenue (ARR) is annualized and related to sales and marketing expenses.
Calculation: Specifically, you subtract the sales of the previous quarter from today's sales and multiply the difference by 4. Because the additional quarterly sales will accrue every year from now on, so it becomes ARR or annually recurring sales. This annualized turnover is now calculated from the marketing expenses of the previous period - because these have caused the increase in sales - and the result is a number that is usually between 0.5 and 2.
FY2021Q3: 1,14
FY2021Q4: 0,92
FY2022Q1: 1,00
FY2022Q2: 1,04
FY2022Q3: 1,36
If the magic number is below 0.5, there is probably no product market fit. No invest in marketing is needed.
If the magic number is between 0.5 and 0.75, you are probably spending the right amount in marketing and sales and the amount should rather be optimized operationally.
If the magic number is above 0.75 or even above 1, you should definitely try to spend even more money on acquisition, i.e. via marketing and sales.
SNOW
SNOW: Time for a big move back to ATH?SNOW looks ready for a move. Daily close over 377.87 can send this to $392 and possible $405 with some volume. Don't think the great R:R is until a confirmation over 377.87. $375.29 you can use, but odds of it failing at 377.87 are high. If it gaps over, you could buy the gap fill in morning or buy gap support for a possible big move.
12/12/21 SNOWSnowflake, Inc. ( NYSE:SNOW )
Sector: Technology Services (Packaged Software)
Current Price: $371.24
Breakout price: $377.00
Buy Zone (Top/Bottom Range): $371.00-$358.50
Price Target: $400.00-404.00 (1st), $429.00-$433.00 (2nd)
Estimated Duration to Target: 49-53d (1st), 84-90d (2nd)
Contract of Interest: $SNOW 2/18/22 375c, SNOW 3/18/22 400c
Trade price as of publish date: $29.40/contract, $28.00/contract
LET IT SNOW PUTSThere is a Bearish wolfe wave setup on the Daily time frame in SNOW that provided entry opportunity on Friday Nov 19. The projected target is calculated by extending a linear line between pivot 1 and 4 and projecting the line. This is represented as the red perforated line, as shown in the chart. The projected target is 300 and then 295. The price is expected to reach these targets within 7 days. The orange wolfe wave pattern uses a different length input value and identifies price tgt up to below 300. The risk and reward for both wolfe waves are excellent.
Weekly Watchlist! 10/11 - 10/15Here is what stocks we are watching this week as well as a recap of last week's watchlist!
Let us know if you have any questions down in the comments!
NYSE:BA
Nice Pennant forming here.
We will be taking a move over $230 with targets of $231, $232, $234
NYSE:SNOW
Nice level forming on SNOW at $328
We will be taking a move over $328 with targets of $330, $333, and $340
Snowflake, Inc. $SNOW reaches pattern target, partial exitSnowflake is a cloud computing-based data warehousing company based in Montana, named after the founders' love for winter sports. I like winter sports, and the ticker SNOW is aesthetically appealing in my portfolio.
The trade setup was straightforward. The company IPO'd in 2020 at $220, and after one quarter that saw investors take price up above $400 per share, all post-IPO gains were given back by mid-2021, and price got down to as low as $180.
Between March - July 2021, $SNOW formed an inverted Head and Shoulders bottom, reflected by the blue curved drawings - a left shoulder, a "head", and a right shoulder. Once price broke above the pattern boundary, I reached a measured target of $320 by applying the width of the pattern (from $180 to $250, or $70) to the breakout level of $250.
$70 + $250 = $320
This measurement criteria is based on the works of John Magee and Robert D. Edwards in Technical Analysis of Stock Trends (5th edition, 1948).
My stop-loss, the "Last Day Rule", and my limit order placement is based on teachings from my friend and active trading legend Peter L. Brandt (Diary of A Professional Commodity Trader, @PeterLBrandt).
I've now covered 3/4 of this position for a gain of 28% (70/250).
My maximum risk, assuming my stop loss order filled peacefully at its activation price was only 4% (10/250).
The risk to reward setup at the time of entry was then (4%) to 28%, or 1 to 7.
Snowflake is probably in line for further price gains, but I have no reason to believe I have an edge at these levels.
$SNOW $NVDA $AAPL $MSFT I OptionsSwing WatchlistSNOW 4H I After a successful breakout out of the ascending triangle. SNOW pulled back to $276 to retest the breakout, a consolidation above can take it to $290.
NVDA 4H I After breaking out from an ascending triangle, it pulled back with the market towards the end of the week. Watching for a bounce near $200 and a run to ER.
AAPL 1D I AAPL average price target is $165. After reporting earnings AAPL has been consolidating in a triangle. Waiting for a breakout favoring the upside.
MSFT 1D I MSFT successfully held above the channel it had established back in 2020, MSFT avg pt is $320. $290 is the key resistance to break for continuation .
$SNOW $CRWD $NIO $MSFT I OptionsSwing WatchlistSNOW 4H I After June, we see another SNOW ascending triangle leading into earnings in September. Watching a bounce near $260 or a break above $276.
CRWD 1D I CRWD was rejected right on our trend line last week near $270, watching for a bounce near $240-$245. CRWD is due to report earnings on 09/01.
NIO 1D I NIO possible cup and handle pattern. Watching for a break above $45 and the trend line. Our scanners picked up bullish activity expiring on 08/06.
MSFT 1D I A bounce above the breakout of this channel ($280-$285) that was formed back in 2020, could take MSFT closer to the average stock price target of $321.
BioTech And Stay At Home Stocks Show Delta WorriesThe major indices like AMEX:SPY NASDAQ:QQQ have held up well despite talks of the delta variant though peeling back a few layers shows that there are underlying concerns. Many biotech, cloud software, and stay at home names are showing strong chart patterns that are poised to move higher. Among those names are NASDAQ:IBB NASDAQ:GILD NASDAQ:ZM CRM and NYSE:SNOW . Meanwhile other stay at home related stocks have already run wild altogether - NASDAQ:ADBE NASDAQ:DOCU AMEX:IGV NASDAQ:BNTX NASDAQ:MRNA . Investors should be cautious as these stocks may be signaling weakness in Q4 as variant fears are causing more and more corporations to require masks and as inflation gets out of hand on Main street, which could ultimately slow growth as the middle and lower class are forced to tighten belts.
$SNOW shows an inversed Head & Shoulders bullish long-termWe can see how an inversed shoulder-head-shoulder is being created. If confirmed the price could go as up as aprox 290$. RSI does not show any interesting view, but we can see a down trend right there in the last few days; in this line, MA (9) is falling,but I consider is just momentum. Moreover, $SNOW is reaching to its floor, so it could activate buy alerts; in this line, MA (50) is below to its current price it could also work as a floor. If it does not break these floors, the stock has two target price (showed in the graph). Disclosure: I'm not long $SNOW. But starting to consider it.
$AAPL $NFLX $BABA $SNOW I OptionsSwing WatchlistBABA 1D I BABA broke from a massive falling wedge established last year, and its ready to run up into its earnings.
AAPL 1D I We saw AAPL break from a triangle pattern and retest the breakout just to make a higher high. Expecting to consolidate near $130.
NFLX 1H I After seeing a consolidation near the $500 price level, we saw NFLX make a push last week to $530 as expected.
SNOW 4H I Following growth stocks, particularly cloud stocks as they are making a quick comeback. SNOW is near IPO levels and we want to see consolidation above $250 for continuation.
$AAPL $NFLX $ABNB $SNOW I OptionsSwing WatchlistABNB 2H I Following ABNB closely as it is breaking a downtrend from March and travel is near pre-covid levels.
AAPL 1D I Tested and broke out of the triangle we highlighted last week. We want to see a consolidation outside of the triangle before the next run.
NFLX 1H I Our bullflag paid last week, we want to see NFLX consolidate above $500 and continue its run up into earnings.
SNOW 4H I Following growth stocks, particularly cloud stocks as they are making a quick comeback. SNOW is near IPO levels and we want to see consolidation above $250 for continuation.