Cloud data platform Snowflake (SNOW) reported 4Q21 earnings after the close Wednesday. Revenue of $384 million was +101% year over year and they had $18 million in operating income. SNOW guided 2022 revenue to $1.88 billion to $1.9 billion (+65% to +67% compared to 2021) and operating margin to 1%. However, the stock is down more than 25% in the after hours.
Why is SNOW melting? SNOW may well provide a great data analytics platform but it’s exactly the kind of expensive, early stage, cloud software stock that is out of favor right now. Even at its current after hours price, SNOW still trades at more than 30x its 2022 revenue guidance. Significant profitability is years away.
If you believe in SNOW long term, there will be a time to buy it but I wouldn’t be in a hurry.