QS Research · Michael Burry's Scion Capital analyst template · 2006
Snowflake Inc. (SNOW)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case -17% · downside -51% · upside +28%
There is no normalized earnings base to average: TTM EBIT is -$1.24B and TTM net income -$1.09B, so all cases use section 13's TTM revenue of $5.43B and FCF of $1.20B (N10, N12, N14, N17). The market is not missing the growth; it is capitalizing it at 17.61x EV/Sales and a 1.2% FCF yield (N1, N23, N24) against Datadog at 14.53x and Open Text at 2.15x (S1). Base: 14.53x x $5.43B = $78.9B EV, + $1.71B cash = $80.6B equity, / 352.80M shares = ~$228, or -17% (S1, N10, N19, N5). Downside: $1.20B FCF at a 2.5% yield = $48.0B, ~$136/share, -51%; upside: 17.61x on $5.43B x 1.289 = ~$354, +28% (N17, N24, N5, N23). The rule is not met for a short because the base is not -30% and upside is +28% > +25%, and not for a long because downside is -51%; watch for multiple compression, not a deep-value buy.
Key numbers
- Share price: $276.10
- Market cap: $97.41B
- Latest financial period: TTM to Jul 31, 2026
- Revenue (TTM): $5.43B
- Price / book: 50.63x
The 15 boxes
- ✓ 1. Long-form business notes
Snowflake sells a consumption-priced cloud data platform (the AI Data Cloud) built on three independently scalable layers across three public clouds and, as of January 31, 2026, 53 regional deployments, versus 23 regional deployments in the FY2021 10-K. Revenue grew every year in the record: $592.0M in FY2021 to $4.68B in FY2026 ($3.63B in FY2025), yet the company is still losing money on operations, with operating income of -$1.44B in FY2026 against -$543.9M in FY2021 and net loss of $1.33B in FY2026, and the loss is not explained away by any disclosed one-off gain. The mix has shifted from use cases (warehouse, lake, data engineering, data sharing) to product categories including AI (Snowflake Intelligence) and Transactions (Snowflake Postgres), with larger customers (733 above $1M trailing-twelve-month product revenue versus 77 in FY2021) but lower net revenue retention (125% versus 168%). Cash generation, not earnings, is the improving line: operating cash flow of $1.22B in FY2026 versus -$45.4M in FY2021, with capex of only $101.6M.
- ✓ 2. Competitive advantage
Snowflake's sources show scale but not a proven durable moat: FY2026 revenue was $4.68B and gross profit $3.15B, with operating cash flow +$1.22B, yet operating income was -$1.44B and net income -$1.33B. It competes with AWS, Azure, GCP and other cloud, legacy database, observability and new entrants. The 10-K itself says open data formats may reduce switching costs and that AWS/Azure/GCP are both suppliers and competitors, so the advantage looks mainly product/scale-based and contestable.
- ✓ 3. 10-Q takeaways
Q2 FY2027 (quarter ended 2026-07-31) shows product revenue of $1,491.9 million, up from $1,334.3 million in the April 2026 quarter and $1,090.5 million a year earlier, with net revenue retention at 126% and 828 customers above $1 million in trailing product revenue. Cash generation decelerated sharply versus the January 2026 quarter — free cash flow $83.8 million versus $765.1 million — and remaining performance obligations fell for a second straight quarter to $9,004.3 million from $9,771.5 million at 2026-01-31. The GAAP result remains a net loss ($191.7 million in the quarter), so profitability here rests on operating cash flow and non-GAAP free cash flow, not on earnings. The filing flags continued customer consumption optimization, shorter contract durations, and two acquisitions funded largely with cash and stock.
- ✓ 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
- ○ 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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