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No. of Recommendations: 23
I freed up some cash from other investments and did a lot of research on SNOW before they went public this week. Ended up passing on buying in as I do not see this company as vastly superior to other SaaS companies followed on this board. As pointed out by others the current price puts them in a completely different league for valuation.

Notice most people are measuring valuation against sales and Snowflake is spending more than any other SaaS company as a percentage of revenue on sales. This is possible because of their net retention rate and superior product, but still wondering if their growth is sustainable without a massive sales spend. They also spend a lot on R&D compared with competitors.

Have some concerns about Capital One as 11% of revenue. Would like to see other large enterprises having this big of a spend. Wondering if Snowflake's target market is overly focused on legacy systems moving to the cloud. Would prefer to see tech companies as the biggest spenders like the way that Fastly has Shopify and TickTock.

Margins are in the 60% range, coming up from 48% a year ago. The margins are lower than other competitors because they are running on the public cloud rather than in their own data centers. Many of the other companies are this board are have their own data centers and show much better margins, despite data center spend impacting margins.

The path to profitability for Snowflake is much less certain than with Zoom, CrowdStrike or Datadog which are already making positive earnings. For Snowflake to become profitable they will need lower expenses, increase margins, and continue landing/expanding perfectly. With a price/sales over 100 currently, the risk/reward ratio is massively skewed on the risk side.
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