SNOW · Snowflake
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $368.89
Note written ·
Price against the kill line
21.1% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $368.89, on record since 11 November 2026. The shares are down 11.8% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $368.89, the 9 October 2026 close and the highest of the past three months, which would show the shares leading the S&P 500 and prove this call wrong.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Technology
Quarter to 31 July 2026, filed 4 September 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,547
- Revenue, change on a year (%)
- +35.1
- Gross margin (%)
- 67.0
- Operating margin (%)
- −17.0
- Free cash flow, four quarters ($M)
- 1,195
- Net cash, cash less debt ($M)
- 60.7
- Enterprise value to sales (×)
- 18.9
- Free-cash-flow yield (%)
- 1.2
All filed numbers
What Snowflake reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 1,547 | +35.1 | 67.0 | −17.0 |
| first filed | 1,391 | +33.5 | 66.6 | −23.4 |
| first filed | 1,284 | +30.1 | 66.8 | −24.8 |
| first filed | 1,213 | +28.7 | 67.8 | −27.2 |
| first filed | 1,145 | +31.8 | 67.5 | −29.7 |
| first filed | 1,042 | +25.7 | 66.5 | −42.9 |
| Pre-tax income ($M) | −188 |
| Net income ($M) four quarters: −1,091 | −192 |
| Diluted shares, change on a year (%) against the quarter to 31 July 2025 | +4.2 |
| Operating cash flow ($M) | 1,253 |
| Capital spending ($M) | 58.0 |
| Free cash flow ($M) | 1,195 |
| Cash and short-term investments ($M) | 2,345 |
| Debt ($M) convertible debt | 2,284 |
| Net cash, cash less debt ($M) | 60.7 |
| Deferred revenue ($M) +13.9% on a year | 2,596 |
| Backlog, orders not yet delivered ($M) +30.4% on a year | 9,000 |
| Receivables ($M) | 719 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) including non-controlling interests | 2,150 |
| Market value ($M) | 102,665 |
| Enterprise value, market value plus net debt ($M) | 102,604 |
| Enterprise value to sales (×) | 18.9 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 47.8 |
| Free-cash-flow yield (%) | 1.2 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 5.3% of shares outstanding sold short, 4.4 days of average trading to cover, +3.6% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $484.1M |
| 12 monthsfrom | $0 | $1.3B |
The thesis
Snowflake's shares look more likely to lag the S&P 500 than lead it over the next three months. Product revenue is growing 37%, but the price is moving with swings in AI-linked stocks. Directors keep selling, and the shares trade at 19.0 times trailing sales. The Q3 fiscal 2027 (FY27) report on 2 December 2026 settles it. Product revenue has to clear the $1,588 million guidance floor, and the $6,070 million full-year guide has to stand.
The rating is Low because the recent bounce came with the sector, without new figures from Snowflake. The shares closed at $269.54 on 5 November 2026 and at $301.22 on 11 November 2026. That rise came alongside an AI rebound led by CoreWeave's results, while Snowflake's own news was product and partner releases. Snowflake's last reported numbers are still from 2 September 2026.
The price already reflects years of growth near current rates. Trefis put the shares at 19.0 times trailing twelve-month sales at the 10 November 2026 close, against 3.2 times for the S&P 500. On that multiple, the 2 December 2026 report needs more than a routine beat to move the shares ahead of the index.
Bullish and bearish views on Snowflake Inc.
The bull case on Snowflake Inc. (SNOW), in brief: growth has sped up three quarters running. The bear case: directors keep selling into the fall.
Bull case
- Growth has sped up three quarters running. Q2 FY27 product revenue was $1,491.9 million, up 37% year over year, per the 2 September 2026 earnings release. TIKR on 3 November 2026 counted it as the third straight quarter of faster growth.
- Existing customers are spending more. Net revenue retention (NRR), which compares what existing customers spend now with a year earlier, was 126% in the 2 September 2026 release. The same release counted 828 customers above $1 million in trailing annual product revenue.
- Recent results cleared guidance comfortably. TIKR said on 3 November 2026 that Snowflake beat the top of its guide by more than 5% in each of the last two quarters.
- Cash generation is rising. Trefis reported on 11 November 2026 that trailing twelve-month cash from operations reached $1.25 billion, up from $838 million a year earlier. The GAAP (generally accepted accounting principles) operating loss narrowed to 17.0% of revenue in Q2 FY27 from 29.7% a year before.
- Snowflake carries little AI capital spending. TIKR put capital spending at 2.2% of revenue in the year ended January 2026, because Snowflake rents compute capacity rather than building data centers.
- Oracle adds a fourth major cloud. On 27 October 2026 Oracle said the Snowflake AI Data Cloud will run as a native first-party service on Oracle Cloud Infrastructure, bought and billed through Oracle.
- Analyst targets sit well above the price. Monness analyst Brian White kept a bullish rating and a $450 target on 9 November 2026. TradingKey listed an average analyst target of $426.71, with a $525 high and a $110 low, on 11 November 2026.
Bear case
- Directors keep selling into the fall. SEC Form 4 filings show director Michael Speiser selling 49,901 shares at an average $275.93 and 840 shares at an average $275.92 on 6 November 2026. Director Benoit Dageville sold 50,000 shares at $292.35 on 4 November 2026, and executive vice president Christian Kleinerman sold 10,000 shares at $306.01 on 2 November 2026, all under Rule 10b5-1 trading plans.
- Large October sales came at higher prices. Form 4 filings show director Frank Slootman exercising 300,000 options at $8.88 and selling 300,000 shares at an average $316.43 on 19 October 2026. Speiser sold 50,741 shares at $344.00 on 2 October 2026.
- The valuation leaves little room. Trefis put the shares at 19.0 times trailing sales on 10 November 2026. TradingKey on 11 November 2026 listed $4.68 billion of annual revenue against a $1.33 billion net loss.
- The price follows AI sentiment. On 5 November 2026 Snowflake fell 7.25%, per Yahoo Finance, while market summaries showed the S&P 500 down 4.36% and the Nasdaq Composite down 5.52%. Fortune called it the biggest technology sell-off since Covid.
- A usage-billed peer gave a soft outlook. Datadog's fourth-quarter revenue projection implied flat sequential growth, per market reports on 5 November 2026.
- A beat may not be enough. In December 2025 Snowflake beat revenue estimates and the shares still fell 11.6% on a weak outlook, per TIKR.
- Backlog and margin slipped. TIKR reported contracted backlog down from $9.77 billion in January to $9.00 billion in July 2026, though 30% above a year earlier. Management expects a 74% adjusted product gross margin for FY27, down from a prior 75% forecast, per Trefis.
Price setup
The last close was $301.22 on 11 November 2026, down 10.7% over three months from $337.38 on 13 August 2026. It sits 21.7% below the 52-week intraday high of $384.56 set on 3 September 2026.
The November low close was $269.54 on 5 November 2026. The shares then closed at $275.88 on 6 November 2026, $291.14 on 9 November 2026, $295.76 on 10 November 2026 and $301.22 on 11 November 2026. That puts them just under $305.84, the 1 September 2026 close before the Q2 report.
The 50-day moving average of adjusted closes is $326.3, above the last close. The 200-day moving average is $242.31, below it. The shares need to recover the 50-day average and the October highs to show leadership. Trefis measured them 19.8% below the 9 October 2026 high close as of 11 November 2026.
Catalysts ahead
- 2 December 2026: Q3 FY27 earnings report after the close; date confirmed by Snowflake on 2 November 2026. Tests the $1,588–1,593 million product-revenue guide, whether 126% net revenue retention holds, whether the $6,070 million FY27 guide stands, and whether the Q4 outlook avoids a repeat of December 2025.
- 9 December 2026: Federal Reserve December policy decision. After two hawkish dissents on 28 October 2026, a rate hike would pressure high-multiple software such as Snowflake, which trades at 19 times trailing sales, whatever its own results.
What would change the view
A daily close above $368.89, the 9 October 2026 close and the highest of the past three months, which would show the shares leading the S&P 500 and prove this call wrong.
What it trades with
Snowflake has traded with AI-linked software and infrastructure names. It fell alongside Palantir, CrowdStrike, Okta and Datadog on 5 November 2026. It rose on 11 November 2026, closing at $301.22 from $295.76, when TradingKey reported the Nasdaq Composite up 1.60% and CoreWeave up 23.72% after CoreWeave's results.
A handful of sessions is too few to measure a stable relationship. Market news on 12 November 2026 reported Nebius trimming its 2026 outlook to the low end of its range. Until the 2 December 2026 report, results from AI infrastructure peers are the main visible driver of the price.
The evidence, claim by claim (8)
- Q2 FY27 product revenue was $1,491.9 million, up 37% year over year; net revenue retention was 126%; 828 customers exceeded $1 million in trailing annual product revenue. Snowflake Q2 FY27 earnings release (SEC EDGAR exhibit) · as of
- Management guided Q3 FY27 product revenue to $1,588–1,593 million (37%–38% growth) and full-year FY27 product revenue to $6,070 million. Snowflake Q2 FY27 earnings release · as of
- Snowflake said it will release Q3 fiscal 2027 financial results on 2 December 2026. Snowflake company announcement via fiscal.ai · as of
- Snowflake traded at 19.0 times trailing twelve-month sales versus 3.2 times for the S&P 500; trailing cash from operations was $1.25 billion, up from $838 million. Trefis, 'Has Buying Snowflake Stock's Dips Paid Off?' · as of
- Director Michael Speiser sold 49,901 shares at an average $275.93 and 840 shares at an average $275.92 on 6 November 2026 under a Rule 10b5-1 plan. SEC Form 4 filings dated 10 November 2026 · as of
- Director Benoit Dageville sold 50,000 shares at $292.35 on 4 November 2026 under a Rule 10b5-1 plan. SEC Form 4 filing dated 5 November 2026 · as of
- Monness analyst Brian White maintained a bullish rating on Snowflake with a $450 price target. Company news via fiscal.ai · as of
- Snowflake shares closed at $269.54, down 7.25%, as the S&P 500 fell 4.36% and the Nasdaq Composite 5.52% in an AI-linked sell-off. Yahoo Finance; market summaries · as of
Sources
- Has Buying Snowflake Stock's Dips Paid Off? · trefis.com ·
- Snowflake Inc Stock (SNOW) Moved Up by 3.07% on Nov 11: A Full Analysis · tradingkey.com ·
- Snowflake Just Dropped 13% in a Week. Is It Time to Sell, or Load Up? · finance.yahoo.com ·
- Tech stocks are suffering their biggest selloff since Covid, as investors see premature end to AI datacenter boom · fortune.com ·
- Cloudflare, Datadog, Elastic, Palantir Technologies, and Zscaler shares are falling, what you need to know · financialcontent.com
- Snowflake Stock Analysis 2026: CoCo Acceleration, $6 Billion AWS Deal, and a $677 Target · tikr.com
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