Why Snowflake (SNOW) Shares Are Sliding Today
Adam Hejl /
April 5, 2023
What Happened:
Shares of data warehouse-as-a-service Snowflake (NYSE:SNOW) fell 6.64% in the morning session after the ADP payrolls report showed that the private sector added 145k jobs in March, much lower than analysts' expectations for 210k. This triggered concerns of a potential recession amid continued comments from Fed officials that rate hikes are still needed to tame inflation. As a reminder, higher rates have a negative impact on equity valuations, as future cash flows must be discounted back.
What is the market telling us:
Snowflake's shares are quite volatile and over the last year have had 66 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Snowflake is up 7.82% since the beginning of the year, but at $145.91 per share it is still trading 35.7% below its 52-week high of $227.09 from April 2022. Investors who bought $1,000 worth of Snowflake's shares at the IPO in September 2020 would now be looking at an investment worth $575.36.
Is now the time to buy Snowflake? Access our full analysis of the earnings results here, it's free.