Snowflake went public today.
Snowflake, a cloud-based data storage and analytics company.
You had me at “cloud.” What’s the ticker?
Awesome, catchy and easy to remember. Are they profitable?
No. They lost $349 million in the fiscal year ending in January and $171 million in the first six months of this year.
Even better, just like Amazon when it started. How about revenues?
Up and to the right. 121% year-over-year growth in Q2. $403 million in sales over the last 12 months (see S-1 here).
Nothing but love. What’s the catch?
Well, its market cap hit a high of $88.4 billion today in its first day of trading. That’s a multiple of 219x sales and a higher market value than 431 companies in the S&P 500 (with lower sales than every S&P 500 member). When Amazon went public in 1997 it was a $442 million company and it only hit an $80 billion market cap in 2011 when its sales were at $40 billion.
But it’s the cloud, right? Valuations don’t matter up there. Surely there are other companies out there with a higher multiple, right?
Yes of course, this is 2020. Nikola ($NKLA) is currently trading at over 121,000x sales.
Is it in the cloud too?
sell plan to sell hydrogen fuel cell electric semi-trucks.
So you’re telling me a truck company that hasn’t sold a truck yet has a higher valuation than a cloud company?
Correct. At the same valuation as Nikola, Snowflake would have a market value of over $48 trillion, 550x higher than today’s intraday high. It would be the largest company in the world by a factor of 24x.
What’s that ticker again?
To sign up for our free newsletter, click here.
Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For our full disclosures, click here.