Snowflake Inc. (SNOW) Stock Analysis
Snowflake Inc. (SNOW) Stock Analysis
Analysis from 10-Q filed 2025-12-05. Data as of Q1 2026.
Overall Grade: F (Concerning)
Snowflake Inc. faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | -40.8% | Below expectations |
| FCF Margin | 23.9% | Strong cash generation |
| Debt/Equity | 0.0x | Conservative leverage |
Investment Thesis: Healthy free cash flow margin of 23.9% provides financial flexibility for growth and shareholder returns.
Explore Snowflake Inc.: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Snowflake Inc. earns -40.8% ROIC, Top 5% in Technology
Snowflake Inc.'s trailing-twelve-month ROIC of -40.8% ranks Top 5% in Technology companies (sector median: 5.2%), driven by NOPAT margin of -31.0% combined with asset turnover of 0.6x. Source: 10-Q filed 2025-12-05. Gross margin of 67.2% with operating margin at -30.6% reflects strong pricing power.
| Metric | SNOW | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -40.8% | Red flag | Below sector median of 5.2% |
| Return on Equity (ROE) | -56.8% | Red flag | Moderate equity returns |
| Gross Margin | 67.2% | Excellent | Strong pricing power |
| Operating Margin | -30.6% | Warning | Moderate operational efficiency |
Cash Flow: Snowflake Inc. generates $1.1B FCF at 23.9% margin, positive NaN/8 quarters
Snowflake Inc. generated $1.1B in free cash flow (TTM), a 23.9% FCF margin, a margin that ranks Top 25% in Technology. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-12-05.
| Metric | SNOW | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 23.9% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $1.1B | Good | Positive cash generation |
| OCF/Net Income | -0.9x | Warning | Potential accrual concerns |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Snowflake Inc. at 0.0x leverage
Snowflake Inc.'s debt-to-equity ratio of 0.0x reflects conservative leverage. Source: 10-Q filed 2025-12-05.
| Metric | SNOW | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.0x | Excellent | Conservative capital structure |
Valuation: Snowflake Inc. trades at -48.7x earnings
Snowflake Inc. trades at a P/E of -48.7x. Free cash flow yield of 2.3% reflects market expectations for growth.
| Metric | SNOW | Rating | Context |
|---|---|---|---|
| P/E Ratio | -48.7x | Red flag | Reasonable valuation |
| EV/Sales | 9.7x | Adequate | Growth premium priced in |
| FCF Yield | 2.3% | Adequate | Lower cash yield |
Capital Allocation: Snowflake Inc. returns 1.8% shareholder yield
Snowflake Inc.'s total shareholder yield is 1.8% (dividends + buybacks 1.8%). Source: 10-Q filed 2025-12-05.
| Metric | SNOW | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 1.8% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 1.8% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $873.5M | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -40.8% | Top 5% | -7.8x below |
| Free Cash Flow Margin | 23.9% | Top 25% | 2.6x above |
| Gross Margin | 67.2% | Top 50% | 1.3x above |
| Operating Margin | -30.6% | Top 5% | -6.3x below |
| Return on Equity (ROE) | -56.8% | Top 5% | -11.6x below |
Financial Scorecard
| Metric | SNOW | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -40.8% | Red flag | Top 5% of sector (median: 5.2%) |
| Free Cash Flow Margin | 23.9% | Excellent | Top 25% of sector (median: 9.1%) |
| Gross Margin | 67.2% | Excellent | Top 50% of sector (median: 51.8%) |
| Debt to Equity Ratio | 0.0% | Excellent | Conservative capital structure |
| Free Cash Flow Yield | 2.3% | Warning | Growth-focused valuation |
Frequently Asked Questions
Q: What is Snowflake Inc.'s Return on Invested Capital (ROIC)?
Snowflake Inc. (SNOW) has a trailing twelve-month Return on Invested Capital (ROIC) of -40.8%. This compares below the sector median of 5.2%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is Snowflake Inc.'s Free Cash Flow Margin?
Snowflake Inc. (SNOW) has a free cash flow margin of 23.9%, generating $1.1 billion in free cash flow over the trailing twelve months. A FCF margin above 20% indicates excellent cash conversion and a high-quality business model.
Q: Is Snowflake Inc. stock overvalued or undervalued?
Snowflake Inc. (SNOW) trades at a P/E ratio of -48.7x, which is above the sector median of N/A. The EV/Sales multiple is 9.7x. Free cash flow yield is 2.3%, reflecting growth expectations priced into the stock.
Q: What is Snowflake Inc.'s revenue and earnings growth?
Snowflake Inc. (SNOW) grew revenue by 29.2% year-over-year. Earnings per share decreased by 2.6% compared to the prior year. Double-digit revenue growth indicates strong demand and market share gains.
Q: Is Snowflake Inc. buying back stock?
Snowflake Inc. (SNOW) repurchased $873.5 million of stock over the trailing twelve months. This represents a buyback yield of 1.8%.
Q: How does Snowflake Inc. compare to competitors in Technology?
Compared to other companies in Technology, Snowflake Inc. (SNOW) shows: ROIC of -40.8% is below the sector median of 5.2% (Top -53%). FCF margin of 23.9% exceeds the sector median of 9.1% (Top 20% of sector). Gross margin at 67.2% is 15.3 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.
Q: What warning signs should I watch for with Snowflake Inc.?
Investors in Snowflake Inc. (SNOW) should monitor these potential warning signs: 1) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-12-05. TTM metrics as of Q1 2026.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.