QS Research · Michael Burry's Scion Capital analyst template · 2006
Snowflake Inc. (SNOW)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -21% · upside +34%
The market is not missing the growth: Q2 FY2027 product revenue rose 37% and FY2027 product guidance was raised to $6,070M (36%), but the stock still trades at N24 17.48x EV/Sales on N10 $5.43B TTM revenue with N12 EBIT of -$1.24B and N15 net income of -$1.09B. Using section 13's TTM revenue base, today's 17.48x gives about $94.9B EV versus N23 $94.99B, or roughly 0% base; 13.89x gives $75.4B EV (-20.6%) and 23.36x gives $126.8B EV (+33.5%), with the multiple range tied to cited operating acceleration and cash-conversion/RPO deterioration rather than to valuation alone. That is not enough margin of safety for a deep-value long, and the negative GAAP P&L plus premium multiple argue against paying up; but positive free cash flow and accelerating guidance are not a short either. Watch: a better entry or a GAAP path to profitability would change the call.
Key numbers
- Share price: $275.88
- Market cap: $97.33B
- Latest financial period: TTM to Jul 31, 2026
- Revenue (TTM): $5.43B
- Price / book: 50.58x
The 15 boxes
- ✓ 1. Long-form business notes
Snowflake's FY2026 10-K describes a consumption-priced AI Data Cloud sold mainly through direct sales, with 13,328 customers as of January 31, 2026, 125% net revenue retention, and 790 Forbes Global 2000 customers contributing about 43% of FY2026 revenue. Revenue rose from $592.0M in FY2021 to $4.68B in FY2026, but FY2026 operating income was -$1.44B and net income was -$1.33B, while operating cash flow was $1.22B. The oldest FY2021 10-K shows a smaller Data Cloud: 4,139 customers, 168% net revenue retention, 23 deployments, and 77 customers over $1M in trailing 12-month product revenue.
- ✓ 2. Competitive advantage
The 10-K shows no proven durable advantage in the numbers: Snowflake has grown revenue from $592.0M (FY2021) to $4.68B (FY2026) and gross profit from $349.5M to $3.15B, yet GAAP operating income has been negative every year of the window, widening from -$543.9M to -$1.44B, with an accumulated deficit of $9.5B at January 31, 2026. The company competes against AWS, Azure and GCP, which are simultaneously its hosts and, per the filing, price its gross margins; its own risk factors say support of open data formats reduces lock-in and switching costs. The one durable-ish economic fact is cash: operating cash flow rose from $110.2M (FY2022) to $1.22B (FY2026) against $101.6M capex, but that cash generation coexists with persistent operating losses and self-described decelerating growth.
- ✓ 3. 10-Q takeaways
The July 2026 10-Q (Q2 FY2027) shows consumption growth re-accelerating: product revenue $1,491.9 million, up 37% year over year, with net revenue retention at 126% and 828 customers above $1 million in trailing product revenue. The same quarter's earnings release raises FY2027 product revenue guidance to $6,070 million (36% growth) from $5,840 million (31%) while lifting non-GAAP operating margin guidance to 14.5% and adjusted free cash flow margin to 23.0%. GAAP remains a loss — operating loss of $(263.0) million and net loss of $191.7 million — and free cash flow of $83.8 million stayed positive but well below the seasonally strong first and fourth fiscal quarters. RPO of $9.00 billion grew 30% year over year but fell sequentially for a third straight reported date.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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