SNOW
Snowflake Inc.NYSEValuation snapshot
Above bull casePrice is above even the bull case.
Price as of Aug 17, 2026 · Valuation Aug 16, 2026
What drives SNOW's base case?
base-case thesisSnowflake's latest growth accelerated while existing customers continued to spend more and its backlog expanded faster than current sales. AI products and broader data workloads should add consumption, but growth should moderate as the company becomes larger. Improving expense efficiency and a declining compensation burden allow Snowflake to become meaningfully profitable while still funding new products.
What shapes the assumptions
Q1 product sales grew by roughly one-third
Product-revenue growth
Raises revenue growth
Existing-customer spending remained about one-quarter above the prior cohort
Net revenue retention
Raises revenue growth
Q1 loss narrowed by roughly twenty percentage points year over year
GAAP profitability trend
Raises operating margin
Adjusted cash generation is guided near one-quarter of sales
Adjusted free-cash-flow margin
Lowers reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 97.5% a year. Over the last 5 years it grew 47.9% a year — so the price assumes far more than it has delivered.
What else could explain it?›
- How confident is this estimate?
- Robustness 39.0/10 (Fragile) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
- Share count is still growing
- Diluted shares grew 3.8% year on year. This valuation uses today's share count, not tomorrow's — continued dilution would spread the same value across more shares.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Base inputs from financials
source period →Base revenue (TTM)
$5B
Diluted shares
345,391,000
Net cash
—
Bear
low confidence$11.24
IV / share
-96.6% vs $329.00
- Explicit cash flows
- $3.08
- Terminal value
- $8.15
- Net cash
- $0.00
- Intrinsic value / share
- $11.24
72.6% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
bear revenue growth (avg 16%) runs well above the trailing -4% trend
bear operating margin (8%) sits well above the best recent margin (-23%)
Revenue growth25.0% → 20.0% → 16.0% → 12.0% → 9.0%medium
How derived: Starting from Q1 revenue growth of 0.33 and management's fiscal-2027 product-revenue guidance of 0.31, this path assumes consumption growth weakens as optimization, competition, and Snowflake's larger revenue base outweigh expanding AI usage.
Why this confidence: Near-term management guidance ↑, Consumption-based revenue variability ↓, Five-year forecast horizon ↓
Evidence for
- Snowflake warns that customer consumption is discretionary, difficult to predict, and vulnerable to optimization and budget rationalization.[Q1 FY2027 Form 10-Q]· primary
Evidence against
- Q1 product revenue grew 0.34, remaining performance obligations grew 0.38, and management raised fiscal-2027 product-revenue guidance to 0.31 growth.[Q1 FY2027 results]· primary
Operating margin8.0%low
How derived: Starting from the Q1 GAAP loss margin of -0.234 and management's plan to reach quarterly GAAP profitability in fiscal 2028, this case assumes stock compensation and continued product spending permit only an 0.08 margin by year five.
Why this confidence: Documented margin improvement ↑, Large unrecognized stock-compensation expense ↓, No long-term GAAP margin target ↓
Evidence for
- Q1 GAAP operating expenses equaled 0.90 of revenue and stock-based compensation equaled 0.29 of revenue, leaving a GAAP operating loss.[Q1 FY2027 Form 10-Q]· primary
Evidence against
- Management guided to a fiscal-2027 non-GAAP margin of 0.135 and stated at Investor Day that Snowflake expects quarterly GAAP profitability in fiscal 2028.[Q1 FY2027 results]· primary
Tax rate24.0%medium
How derived: Starting from the 0.21 U.S. federal corporate rate, this case adds state and foreign taxes and assumes Snowflake eventually exhausts loss carryforwards, producing a normalized 0.24 rate.
Why this confidence: Statutory federal rate ↑, Uncertain use of loss carryforwards ↓, Future geographic profit mix ↓
Evidence for
- The IRS states that corporations generally calculate federal tax by multiplying taxable income by 0.21, before state and foreign taxes.[IRS Publication 542]· primary
Evidence against
- Snowflake reported minimal foreign profits and maintains substantial U.S. and U.K. deferred tax assets under full valuation allowances, which could shelter future taxable income if realized.[Q1 FY2027 Form 10-Q]· primary
Reinvestment rate45.0%low
How derived: Starting from management's stated intention to keep expanding research, sales capacity, AI infrastructure, and acquisitions, this case retains 0.45 of after-tax operating profit for reinvestment because weak efficiency would require heavy spending to sustain even slower growth.
Why this confidence: Explicit investment disclosures ↑, Reinvestment includes internally developed intangible capacity ↓, No company-reported reinvestment ratio ↓
Evidence for
- Snowflake says it expects costs to increase as it invests in platform development, research, sales capacity, AI, machine learning, and acquisitions.[Q1 FY2027 Form 10-Q]· primary
Evidence against
- Snowflake generated an adjusted free-cash-flow margin of 0.191 in Q1 and guided to 0.23 for fiscal 2027, indicating a capital-light model despite continued investment.[Q1 FY2027 results]· primary
Terminal growth2.0%medium
How derived: Starting from the Federal Reserve's 0.02 long-run inflation goal and recent real GDP growth of 0.015, this case assumes Snowflake eventually grows only with inflation as competition offsets industry expansion.
Why this confidence: Central-bank inflation anchor ↑, Terminal period is far beyond company guidance ↓
Evidence for
- The Federal Reserve reaffirmed an 0.02 longer-run inflation objective, providing a conservative nominal growth floor for a mature company.[Federal Reserve July 2026 Monetary Policy Report]· primary
Evidence against
- Snowflake serves data engineering, analytics, applications, collaboration, and AI workloads, so durable real expansion could allow growth above inflation.[Snowflake fiscal-2026 Form 10-K]· primary
Base
low confidence$32.22
IV / share
-90.2% vs $329.00
- Explicit cash flows
- $8.03
- Terminal value
- $24.18
- Net cash
- $0.00
- Intrinsic value / share
- $32.22
75.1% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
base revenue growth (avg 21%) runs well above the trailing -4% trend
base operating margin (15%) sits well above the best recent margin (-23%)
Revenue growth31.0% → 25.0% → 20.0% → 16.0% → 12.0%medium
How derived: Starting from management's fiscal-2027 product-revenue guidance of 0.31 after Q1 product growth of 0.34, this path assumes customer expansion and new AI workloads remain strong but naturally decelerate with scale.
Why this confidence: Current-year management guidance ↑, Multiple supporting customer metrics ↑, Deceleration beyond guided periods ↓
Evidence for
- Q1 product revenue grew 0.34, net revenue retention was 1.26, million-dollar customers grew 0.29, and management raised full-year product-revenue guidance to 0.31 growth.[Q1 FY2027 results]· primary
Evidence against
- Snowflake states that remaining performance obligations do not reliably predict revenue because consumption timing, renewals, rollover rights, and contract duration vary.[Q1 FY2027 results]· primary
Operating margin15.0%medium
How derived: Starting from Q1's -0.234 GAAP margin, fiscal-2027 non-GAAP guidance of 0.135, and management's fiscal-2028 quarterly GAAP profitability objective, this case assumes scale and declining stock compensation intensity lift the year-five GAAP margin to 0.15.
Why this confidence: Observed GAAP expense leverage ↑, Management profitability timetable ↑, Large stock-compensation overhang ↓
Evidence for
- The Q1 GAAP loss margin improved to -0.234 from approximately -0.429 a year earlier, while management expects stock compensation to decline as a share of revenue.[Q1 FY2027 Form 10-Q]· primary
Evidence against
- Q1 stock-based compensation was $402.5 million and unrecognized compensation cost was approximately $3.8 billion over a weighted-average 2.9 years.[Q1 FY2027 Form 10-Q]· primary
Tax rate21.0%medium
How derived: Starting from the statutory U.S. federal corporate rate of 0.21, this case assumes loss carryforwards offset state and foreign tax leakage sufficiently for the normalized consolidated rate to remain near 0.21.
Why this confidence: Clear statutory benchmark ↑, Cross-border tax mix ↓, Loss-carryforward timing ↓
Evidence for
- The IRS specifies a 0.21 federal corporate income-tax rate.[IRS Publication 542]· primary
Evidence against
- Snowflake operates across numerous tax jurisdictions and says its cash taxes depend on local rates, deduction timing, loss carryforwards, and tax credits.[Q1 FY2027 Form 10-Q]· primary
Reinvestment rate35.0%low
How derived: Starting from fiscal-2027 adjusted free-cash-flow guidance of 0.23 and continued investment in AI, product development, and sales capacity, this case reinvests 0.35 of after-tax operating profit while allowing improving scale efficiency.
Why this confidence: Cash-flow guidance ↑, Capital-light infrastructure model ↑, Difficulty measuring expensed growth investment ↓
Evidence for
- Management plans continued investment in research, platform development, AI, sales capacity, and targeted acquisitions.[Q1 FY2027 Form 10-Q]· primary
Evidence against
- Purchases of property and equipment and capitalized software were only about $10.4 million in Q1, demonstrating limited physical-capital requirements.[Q1 FY2027 results]· primary
Terminal growth2.5%medium
How derived: Starting from the Federal Reserve's 0.02 inflation objective and positive long-run real economic growth, this case gives Snowflake modest real growth while keeping its perpetual rate below expected nominal economic growth.
Why this confidence: Macroeconomic long-run anchors ↑, Competitive position decades ahead ↓
Evidence for
- The Federal Reserve's 0.02 inflation objective and CBO's continuing real-growth projections support nominal growth above 0.02 for a mature participant in the economy.[CBO Long-Term Budget Outlook Data]· primary
Evidence against
- Snowflake identifies intense and rapidly changing competition from cloud providers, database vendors, and new AI technologies.[Snowflake fiscal-2026 Form 10-K]· primary
Bull
low confidence$72.54
IV / share
-78.0% vs $329.00
- Explicit cash flows
- $15.95
- Terminal value
- $56.59
- Net cash
- $0.00
- Intrinsic value / share
- $72.54
78.0% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
bull revenue growth (avg 26%) runs well above the trailing -4% trend
bull operating margin (22%) sits well above the best recent margin (-23%)
Revenue growth34.0% → 30.0% → 26.0% → 22.0% → 18.0%low
How derived: Starting from Q1 product growth of 0.34, 0.38 growth in remaining performance obligations, and rapidly expanding AI usage, this path assumes AI and platform consolidation sustain unusually strong consumption growth despite increasing scale.
Why this confidence: Strong current AI adoption metrics ↑, Forecast exceeds management guidance ↓, Unproven durability of new AI workloads ↓
Evidence for
- More than 13,600 accounts used Snowflake AI capabilities, Snowflake Intelligence usage more than doubled sequentially, and Cortex Code was used by over 7,100 accounts.[Q1 FY2027 results]· primary
Evidence against
- Management's full-year product-revenue guidance is 0.31 growth, below the bull case's first-year assumption, and management cautions that new-product adoption may not produce durable consumption.[Q1 FY2027 results]· primary
Operating margin22.0%low
How derived: Starting from rapid improvement in the Q1 GAAP loss, 0.135 fiscal-2027 non-GAAP guidance, and management's fiscal-2028 GAAP profitability timetable, this case assumes sustained high growth produces enough sales and research leverage for a 0.22 year-five GAAP margin.
Why this confidence: Strong recent expense leverage ↑, AI infrastructure margin uncertainty ↓, Margin materially above current guidance ↓
Evidence for
- Research and development fell to 0.39 of revenue from 0.46 and general and administrative expense fell to 0.09 from 0.20, demonstrating substantial operating leverage.[Q1 FY2027 Form 10-Q]· primary
Evidence against
- New AI products and GPU inference can compress product gross margins, while stock compensation is expected to increase in absolute dollars.[Q1 FY2027 Form 10-Q]· primary
Tax rate18.0%low
How derived: Starting from the 0.21 federal rate, this case assumes accumulated losses, tax credits, and a favorable international profit mix reduce the effective normalized rate to 0.18.
Why this confidence: Documented deferred tax assets ↑, Rate below the federal statutory benchmark ↓, Uncertain future tax-law and geographic mix ↓
Evidence for
- Snowflake maintains U.S. and U.K. deferred tax assets under full valuation allowances and reports that net operating losses and tax credits affect cash taxes.[Q1 FY2027 Form 10-Q]· primary
Evidence against
- The statutory U.S. federal corporate rate alone is 0.21, before state taxes and taxes in foreign jurisdictions.[IRS Publication 542]· primary
Reinvestment rate25.0%low
How derived: Starting from Snowflake's capital-light delivery model and fiscal-2027 adjusted free-cash-flow guidance of 0.23, this case assumes product reuse, partner infrastructure, and sales productivity let the company retain only 0.25 of after-tax operating profit while sustaining high growth.
Why this confidence: Capital-light cloud delivery ↑, Large infrastructure commitment ↓, High growth with low modeled reinvestment ↓
Evidence for
- Snowflake produced positive free cash flow while relying on third-party public-cloud infrastructure, limiting owned property and equipment requirements.[Q1 FY2027 results]· primary
Evidence against
- Snowflake committed to a $6 billion multi-year AWS agreement and continues investing in AI inference, GPUs, research, sales capacity, and acquisitions.[Q1 FY2027 results]· primary
Terminal growth3.0%low
How derived: Starting from 0.02 long-run inflation plus continuing real economic expansion, this case assigns Snowflake 0.03 perpetual growth because data and AI workloads remain structurally faster growing than the mature economy.
Why this confidence: Broadening workload portfolio ↑, Perpetual real growth requirement ↓, Long-run technological disruption risk ↓
Evidence for
- Snowflake's platform spans data engineering, analytics, AI, applications, and collaboration, creating multiple long-duration consumption sources.[Snowflake fiscal-2026 Form 10-K]· primary
Evidence against
- The Federal Reserve's long-run inflation objective is 0.02, so sustaining 0.03 indefinitely requires continuing real growth and competitive relevance.[Federal Reserve July 2026 Monetary Policy Report]· primary
Valuation robustness
reliability of the estimate, not a stock rating39 / 100 · Fragile
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 75% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- The bear-to-bull range spans 190% of the base value — the outcome is highly uncertain.→ scenarios
- The reinvestment assumption is low-confidence.→ reinvestment
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q2 2025 | 28.9% | 0.19 | -17.4% | 334.07M | 2.1% |
| Q3 2025 | 28.3% | 0.27 | -21.9% | 331.76M | 0.7% |
| Q1 2026 | 25.7% | 0.55 | — | 332.66M | — |
| Q2 2026 | 31.8% | 0.17 | -10.5% | 335.22M | 0.3% |
| Q3 2026 | 28.7% | 0.33 | 25.7% | 339.65M | 2.4% |
| Q1 2027 | 33.5% | 0.67 | 22.3% | 345.39M | 3.8% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The 0.0468 input is the U.S. Treasury's 10-year constant-maturity yield for August 14, 2026, used as the nominal U.S.-dollar risk-free rate.
Snowflake is classified economically as system and application software, for which the January 2026 U.S. sector dataset reports a levered beta of 1.28 across 309 firms.
The input uses Damodaran's June 1, 2026 trailing-cash-flow implied U.S. equity risk premium of 0.0418 rather than a historical average.
The input is Snowflake's NYSE closing price on July 30, 2026, the latest closing observation available from the cited market-data record.
Generated 8/16/2026, 8:40:24 AM · pipeline v1.1.0