Snowflake Inc. fell 11.72% to $132.42 in the latest close session even as the broader market moved higher. The S&P 500 gained 0.62%, the Dow rose 0.58% and the Nasdaq advanced 0.83%.
The move leaves Snowflake down 16.41% over the past month, a sharp lag against the S&P 500's 0.8% monthly gain and the Computer and Technology sector's 2.41% rise. Investors now have their eyes on the company's upcoming earnings disclosure, where analysts expect Snowflake to report earnings of $0.33 per share on revenue of $1.32 billion. That would mark a 37.5% increase in EPS and a 26.63% increase in revenue from the same quarter a year earlier.
Full-year estimates call for earnings of $1.8 per share and revenue of $5.89 billion, rises of 44% and 25.73% from last year, respectively. The consensus EPS estimate has not moved in the past 30 days, suggesting analysts have yet to shift their view ahead of the report.
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Valuation remains part of the debate. Snowflake's forward price-to-earnings ratio stands at 83.36, far above the industry average of 18.39, while its PEG ratio is 3.81 versus 1.03 for the Internet - Software industry. Snowflake carries a Zacks Rank of #3, or Hold, and that industry sits at 141 in the Zacks ranking, placing it in the bottom 43% of more than 250 industries.
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That mix leaves Snowflake in an awkward spot: the market is rewarding the sector overall, but the stock is still being priced for growth that has to show up in the numbers. The next earnings report will say whether investors have been too cautious or not cautious enough.
