Snowflake's Growth Slows Down -- Is the Stock a Buy?
Snowflake's (NYSE: SNOW) cloud-based data platform is a big hit with its more than 7,200 customers. Those customers are expanding spending on Snowflake's platform rapidly -- the company's net revenue retention rate was 165% in the third quarter. There are now 287 customers spending at least $1 million annually with Snowflake, a number that has nearly doubled over the past year. All of this led to revenue growth of 67% in the third quarter.
While Snowflake's results look great, the company's guidance was a different story. Snowflake expects to generate product revenue between $535 million and $540 million in the fourth quarter, good for year-over-year growth of 49% to 50%. What's more, adjusted operating margin will plunge to just 1%. That metric was 8% in the third quarter.
Snowflake stock was down around 6% in premarket trading on Thursday as investors digested this growth slowdown. Is it time to buy the stock? Or should investors hold back as headwinds come into view?
Source Fool.com
