![]() ![]() 4x sales would be $606 with our estimate, or 16% per year. If you think 2032 $SNOW will warrant a 4x price to sales ratio (similar to Google), then you can adjust the sheet to get the higher price. If you buy now, you're still getting a 9% annual return for the next 10 years. If you bought above that this past year, that sounds low. So based on these estimates, a good price for $SNOW in 2032 (10 years from now) is $303.05. Make sure to account for numbers in thousands or millions. We basically take the future revenue, multiply by the sales ratio we guess, and then divide by the number of outstanding shares. Here's the math to figure out the future stock price in 2032. To figure out the stock price in 2032, we need to guess at a reasonable price to sales ratio for 2032 $SNOW.Ģx is a conservative estimate. Then I guess it might slow 20% per year, drag to 2032.Īnd we get a revenue estimate for $SNOW in 2032. The #s in the 4th col are the % the growth rate is slowing by. ![]() Here are the annual revenue numbers I found for $SNOW from 2019-2021: $96m, $264m, $592m, $1219m.įrom these I can calculate the rev growth rate year by year. Let's calculate $SNOW's rev growth.įor older companies, like $GOOG, you can just look up the 5 year growth rate on YCharts or something like that: If I don't tweet now, I'm pretty sure the thread will disappear.)īack from dinner. (Going to dinner, so will need an intermission on this. So that's what I'll do, try my best to estimate Snowflakes revenue growth. We're investing for 10 years out, so maybe can wait for that. If they grow 10x again over the next few years, then their sales multiple is only 4x, which is inline. Sounds good in a bear market.īut Snowflake is growing fast, maybe fast enough to warrant the high sales multiple. Someone recently said sell any stock that is > 10x sales. But remember their market cap is $40b, that's 33x sales.įor reference, Google stock is 5x sales. Sales have grown from $96m in 2019 to $1.2B in 2022. They've been growing sales rapidly, one of the fastest growing businesses ever. Since Snowflake is a young company, with negative EPS, let's use sales. We could do this by trying to estimate earnings out 10 years or sales (revenue) out 10 years. Let's calculate fair value to find out if we should buy. In terms of market cap it shot up to about $120b and is around $40b now. Their stock shot up $387 a share, and recently has dropped to $126. And in general, they may become a required service for all big companies. They want to help some of them sell that data. They help companies with tons of data to use that data more effectively. Snowflake ($SNOW) is a "cloud computing–based data warehousing company". ![]() Let's see how it works with a specific stock: $SNOW Once I calculate fair value, I look to buy when the price is below that value… and look to sell when the price is above that value. So calculating fair value for me means estimating what the price of the stock will be 10 years from now, and then seeing if the current price makes that worth it. If I'm not committed to holding that long, I pass on the stock. I'm investing for the long term, 5-10 years out. This is not investment advice, but an example □ on how I calculate "fair value" for a stock before investing in it. How do you know if that stock that just fell 80% is "on sale" or not? ![]() As we enter (or exit?) this bear market in stocks, there will be some buying opportunities. ![]()
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