News – AU – Teradata Stock: Snowflake on a budget?

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KIEV, UKRAINE – 0412th2018: The Teradata Corporation logo can be seen in this photo illustration [] is displayed on a smartphone (photo illustration by Igor Golovniov / SOPA Images / LightRocket via Getty Images)

We believe that Snowflake (NYSE: SNOW), a cloud data warehousing solutions provider, is significantly overvalued when compared to Teradata (NYSE: TDC), a database and analytics software company that Snowflake has a market cap from approx 82 billion USD worth approx 75x futures while Teradata’s market cap is just over $ 5 billion USD or approx 3-fold forward transactions Is this valuation gap useful? We Don’t Believe That Sure, Snowflake is the hottest name in the cloud data warehousing space, popular with investors and its revenue is growing faster, but there’s more to this story. While Teradata is generally associated with on-premises databases, it has its own own cloud-based product makes better than expected progress We believe this may change in how Teradata looks, potentially allowing investors to re-evaluate the stock and fill the valuation gap with Snowflake Let’s look at the financial performance of the two companies, Take a closer look at Cloud Data Warehousing Products and Reviews to Learn More Snowflake Vs Teradata: SNOW Stock Looks Significantly Overvalued Compared to TDC

Snowflake’s sales are on track to grow over 140% annually between Fiscal Year 19 and Fiscal Year 21 (Fiscal year ended January) as the demand for its cloud-based product has increased sharply in fiscal year sales 21 is expected to be around $ 580 million by consensus estimates when the company releases its results in the first week of March, by comparison, Teradata has seen revenue drop from around $ 2.2 billion in 2018 to about $ 1.8 billion in 2020 However, as the on-premise warehouse model faced competition from cloud-based gamers, Teradata is profitable Adjusted operating margins were around 13% last year, while these aren’t huge margins for a tech company, they are still better than Snowflake, which is still extremely loss making

While Snowflake has more than doubled its business every year, Teradata’s cloud operations are also gaining traction in the fourth quarter of 2020, the company announced that Annual Recurring Revenue (ARR) – this is the annual value of all recurring contracts as of the fourth quarter – for public cloud-based services increased to $ 106 million, an increase of 165% year over year Year Much like Snowflake, Teradata’s product is also cloud-independent and works on major public clouds from Amazon, Microsoft, and Google.The company also has a large number of existing customers to whom it can potentially sell its cloud-based offering in the company’s call for profit It was even pointed out that Snowflake had taken some customers away.Overall, Teradata expects ARR in the public cloud to increase by at least 165% year-over-year in the first quarter of 2021, and ARR to double year-over-year in 2021
Coming back to the valuation If we were to evaluate Teradata’s cloud business alone by multiplying Snowflake’s current 75 times revenue to its run rate revenue of $ 106 million, the business would be valued at have roughly $ 8 billion – excluding Terada’s profitable legacy businesses, which still account for over 90% of sales revenue, but Teradata’s current total market cap is only about $ 5 billion, meaning the company will be able to should be drawing value from the cloud business as it continues to see strong growth in the coming quarters. Overall, we believe Teradata stock is at a premium at this point in time compared to Snowflake due to the lower valuation and price risk and the potential Cloud Business Upward Potential Makes Better Choice We believe the P / S multiple of 75x for Snowflake versus below 3x for Teradata is likely to decrease in the future, implying better returns for Teradata stocks

Snowflake (NYSE: SNOW) stock is trading around $ 286, down around 26% from its December highs, partly due to a partial lockdown expiration that allowed employees allowed some sell-side analysts to be cautious about the company’s valuation, with Snowflake stock now trading at projected sales roughly 75 times FY 22 (FY-Jan), far However, over the broader Internet software sector, which trades at around 15x P / S [1] hypergrowth names like Snowflake cannot be valued by multiples alone, and investors need to understand the company’s broader history and view its ability to drive long-term growth

Snowflake sells database warehousing software – using a similar standard offered by on-premise players like Oracle – specially designed for the cloud. This model offers much more flexibility and scalability, with prices also depending on usage Are variable Snowflake’s revenues are projected to double to about $ 580 million in FY21, and consensus figures show that they will grow by nearly 90% next year.There is good reason to believe that Snowflake will continue to grow rapidly in the first place Snowflake estimates that the addressable market is large at $ 81 billion. Given this consensus, sales estimates for 2022 are close to $ 1.1 billion, the company has plenty of room for growth. While there are other competitors in this space, including Amazon’s Redshift, Azure Synapse from Microsoft and Big Query from Google, Snowflake offers a strong pro Product Differentiation Snowflake’s Model Works on Different Cloud Platforms Snowflake also separates storage from the computer so each can be scaled or shrunk independently to give users more flexibility and cost savings.Snowflake is also apparently easier for customers to use without that a dedicated database administrator is required

The low interest rate environment is causing investors to take a longer-term look at stocks and discount short-term gains for long-term gains This has resulted in investors paying a high premium for growth names like Snowflake’s significant growth runway coupled with its innovative product, however, should make the stock a decent bet at current levels in the long run, although we don’t think the stock will be short-term There is little room for error, either. If Snowflake’s growth falters for any reason, the stock could see a significant correction

Cloud-based data warehousing company Snowflake (NYSE: SNOW) saw its shares drop nearly 30% last month, while on-site Snowflake, which has more than twice as much revenue this fiscal year, doesn’t really do much Changed, there are a few factors that likely drove the sell-off.First, by consensus over 130 times, Snowflake stock remains very richly valued in FY21 and is roughly 130% above the IPO price given those big gains, investors should be Posting some gains Second, Snowflake was locked in for the first time in mid-December after going public, allowing employees to sell 25% of their vested options.Although that had a limited impact, investors are likely concerned that the lockdown will expire in full, which will happen this March That will put much more pressure on the stock The Snowflake Float, or the stocks that Anle Third, with the global rollout of Covid-19 vaccines, investors could rethink their allocation to cloud computing stocks, which were a hot topic during the pandemic, and switch to more value bets at the same time This could also be a factor affecting the snowflake inventory

Cloud-based data warehousing startup Snowflake (NYSE: SNOW) rallied over 20% last week to around $ 330 per share and valued the company at around $ 90 billion While there hasn’t been much news from the company over the past week, there could be a few factors that were driving the stock higher.First, Snowflake is slated to be out on Aug. December to publish its first quarter results as a public company, and investors likely expect strong numbers for perspective, the consensus estimates the company will have sales of approximately $ 148 million and loss per share of approximately $ -026 Regardless of that Investors further doubled their high-growth and software stocks last week after taking a breather amid vaccine news earlier this month, for example, Zoom surged about 12% over the past week, while Tesla stock rose about 18% % increased This likely helped Snowflake too.While Snowflake’s history and growth rates are compelling, the company’s high valuation remains an issue considering it is now trading at around 150 times its projected sales of 2021 (In our note below see the main risks Snowflake faces)

Snowflake (NYSE: SNOW), the cloud-based data warehousing company that went public in September, is valued at over $ 65 billion, or around $ 240 per share, below we toss take a look at some of the main risks the company faces

With Snowflake’s software, companies can manage and analyze large amounts and different types of data in public clouds such as Amazon AWS, Google Cloud and Microsoft Azure on a single, easy-to-use platform, but these public cloud players also offer their own data warehousing For example, Amazon AWS offers Redshift while Google offers BigQuery, and these companies have a strong incentive to advertise their own warehouse offerings, which allows them to retain customers for their products and services, Snowflake recognizes this risk in its S-1 -Log in, noting that these companies could use control of their public clouds to embed innovations or privileged features for their competing offerings or to bundle their competing products Snowflake also relies on the infrastructure of the big cloud players like AWS, and it is also possible that they S nowflake offer unfavorable prices Such measures could adversely affect Snowflake’s business and profitability

Snowflake stocks also carry significant valuation risk considering they are trading at projected sales of about 115x for fiscal year 21 compared to the broader software segment that trades at about 8x [1] ] The company has very little margin for error in these valuations and must execute them perfectly to justify its share price. Furthermore, Snowflake’s free float – the number of shares held by public investors – is quite small The company is only offering 28 million shares during its IPO, or about 10% of its total outstanding shares, and the low stock offering is without a doubt a primary reason the stock has risen this much since it was listed, with Snowflake stock being roughly double that IPO price, it is very likely that employees and investors can pay off if the lock-up period after the IPO expires in March 2021, which puts pressure on the stock

Last month, Palantir (NYSE: PLTR) and Snowflake (NYSE: SNOW) went public – two relatively well-known software players. Snowflake’s software enables companies to store large amounts and different types of data on public clouds like Amazon AWS Manage and analyze on a single, easy-to-use platform Palantir offers big data and analytics solutions that are mainly used by governments and intelligence agencies, although it has expanded its presence in the commercial space

While the two companies focus on big data, investors rate them very differently.Snowflake stocks are trading at over 120 times forecast sales for fiscal year 21 (fiscal year ended January), while Palantir is trading at nearly 15 times forecast sales for the fiscal year 20 (fiscal year end of December) is traded Does it make sense? How do the companies compare in terms of business models, sales growth rates and margins? Please see below for more details

Palantir’s revenue increased 24% in 2019 to around 740 million USD, and growth is set to accelerate to over 40% in 2020 as Covid-19-related disruptions increased demand for the company’s services, compared to Snowflake’s sales jump 173% from 97 million USD in fiscal year 19 to around 265 million USD in FY 20, although the growth rate is expected to slow to around 110% in the current fiscal year based on consensus numbers. Overall, Snowflake sales should grow faster compared to Palantir, considering the SaaS-based model, which is based on much less customization options a large customer base can be scaled Palantir, on the other hand, needs engineers to adapt its tools to the specific needs of customers.Snowflake had over 3 in July 2020100 customers, compared to Palantir, which had around 125 customers in the last fiscal year

While Palantir is slightly ahead in terms of profit margins considering it is the more mature company (Palantir was down in 2003 versus Snowflake, which was founded in 2012), we expect Snowflake to be more profitable in the long run due to its profit margin, relatively more standardized product and lower customer acquisition costs Snowflake achieved a gross profit margin of 62% for the first six months of fiscal year 21, with operating margins of -72% Palantir’s gross margin was around 72% in the first half of 2020, its operating margin around -35%

The Snowflake share has more than doubled from its initial public offering price of USD 120 to currently around USD 250, and the company to around 70 billion USD Valued Palantir, on the other hand, hasn’t moved too much since it was listed and is valued at around $ 15 billion.There are several reasons for Snowflake’s premium valuation.First, the company is growing much faster than Palantir and should be given its highly scalable delivery model Second, Snowflake’s business is focused, unlike Palantir, which is heavily exposed to government mandates – particularly in areas of surveillance and national security – that create transparency and perceptual problems , to more commercial customers

Even so, Snowflake has significant valuation risk considering it trades around 122x projected revenue for Fiscal Year 21, compared to Palantir, which trades only around 15x projected revenue for 2020. History could change quickly if the As Snowflake’s growth rates slow and the company faces competition from cloud majors like Amazon and Google, who offer their own data warehousing solutions, investors might reconsider valuation.On the other hand, investors could double Palantir stock if they have more evidence See that the company is making progress in the commercial sector through high-profile deals or stronger sales growth

Snowflake (NYSE: SNOW), the cloud-based data warehousing company that recently went public, is valued at around $ 60 billion, or around $ 220 per share, with the company trading a whopping $ 220 billion 230x revenue – way above many other high-growth SaaS names Can Snowflake justify this rating? In our interactive dashboard analysis for evaluating Snowflake: expensive or cheap, we split the sales and valuations of the company and compare them with other high-growth software players. Parts of the analysis are summarized below

With Snowflake’s software, companies can manage and analyze large amounts and different types of data in public clouds such as Amazon AWS, Google Cloud and Microsoft Azure on a single, easy-to-use platform. Snowflake will benefit as companies move increasingly to the cloud and use big data and artificial intelligence at the same time. Although large public cloud players have their own data warehousing solutions (Amazon AWS offers Redshift, Google BigQuery), the Snowflake platform offers more flexibility compared to its competitors and works across platforms The big cloud players however, have a strong incentive to advertise their own warehouse offerings as they can retain customers to their platforms and services. Chances are these companies could use their vast resources and control of their respective platforms to gain an advantage over Snowflake / p>

Let’s take a closer look at what drives Snowflake’s revenue Snowflake has two operating segments 1) Products, which include Snowflake’s key data warehousing solutions Customers pay according to the computation and storage they use 2) Professional Services – including consulting, on-site technical solution services and training related to the platform

Product sales of Snowflake increased from 96 million USD in fiscal year 19 to around 252 million In FY 20, as the company increased its customer base by 152% from 948 in FY 19 to December 2392 users increasedBased on historical growth rate and growth in the second quarter (at 3rd117 customers in July 2020), we expect Snowflake’s customer base to grow to around 4 in fiscal year 21600 will grow, with total product sales expected to be approximately $ 530 million. Snowflake total sales, including Professional Services sales, increased from 97 million In FY19 to around $ 265 million in FY20, and we expect it to increase 110% in FY21 to around $ 557 million USD will rise

Now, in addition to adding new customers quickly, Snowflake is better monetizing existing users. Snowflake’s Net Sales Retention Rate – this is the percentage of sales withheld after accounting for upgrades, downgrades, and churn from the previous year – was 158 %, indicating that existing customers continue to spend more

With policy rates close to zero, investors have generally paid a premium for growing Snowflake stock at roughly 110 times our forecast fiscal 21 sales for the company and over 230 times sales for the fiscal year 20 is trading, but looks expensive Let’s compare Snowflake with other high-growth SaaS and database players Datadog is trading with 76x trailing sales and recorded sales growth of 83% in 2020 Okta trades with a 25-fold decrease in sales and grew 46 in the last fiscal year % MongoDB is trading 22x, growing 58%

Sure, Snowflake is growing faster than these companies, but there’s another reason the stock could trade so high, which is a low stock offering. Snowflake’s free float – that’s the number of stocks held by public investors – amounted to only 28 million shares, or about 10% of the total shares outstanding, and the low supply of shares is likely to have resulted in a rise in price.Since Snowflake stock is nearly double the IPO price, it’s very likely that After the blocking period after the IPO, employees and investors decide to pay out, which puts pressure on the share

While Snowflake looks overpriced compared to Teradata, 2020 has created many other price discontinuities that can offer attractive trading opportunities, for example you might be surprised how the stock valuation for Microsoft vs. Corcept Therapeutics shows an interruption in their relative operational growth.You can find many such discontinuous pairs

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News – AU – Teradata Share: Snowflake on a Shoestring?

Source: https://www.forbes.com/sites/greatspeculations/2021/02/22/teradata-stock-snowflake-on-a-budget/