It's been hard yards recently for the Snowflake [NYSE:SNOW] faithful. While the stock has been showing some signs of life recently, the shares have had a punishing summer. Snowflake stock dropped off a cliff back in the spring and has never really shown much danger of recovering off the $100 level.
Recent buying activity could just be the set up for another false dawn, as we saw in August. Snowflake currently ranks in the bottom 30% of information technology companies, according to research from Bridgewise. Snowflake is evidencing strong underperformance both in terms of net change in cash and the return on equity. Weaker results in these key metrics for IT firms has rarely led to stock outperformance.
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Snowflake is a provider of cloud-based data storage for numerous US organisations as well as overseas clients. It is centrally positioned in the cloud-based data ecosystem with additional exposure to the growth in AI-driven applications. On the surface it should be a darling for tech investors, but the stock is down 21% over the last 12 months and off by 38% YTD.
The market did not take well to a sharp drop in the stock's EPS, although EBITDA has improved (based off Q2 2024 numbers published at the end of August). Revenues have been steadily improving although the loss-level is also picking up. The company does not compare well with its peers, if you crunch the numbers using an AI stock analysis matrix.
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