Snowflake Stock Attempts Breakout. Is It Time To Buy? | IBD Live

TL;DR

Snowflake's stock has been experiencing choppy action, but it is holding its own near the top. The company is still in a base after making a significant move off the bottom, and its earnings have started to improve.

Transcript

[Applause] snowflake uh is holding its own uh near the top of this kind of choppy action what a flat base on on a weekly by the way too is it yeah um there yeah I the stock had a nice move from 140 back in October all the way up to 200 so this is normal for it to go back and forth and back and forth but what I'd really like to see is for it to tigh... Read More

Key Insights

• 💪 Snowflake's stock has been consolidating in a base after a strong move from $140 to $200.
• 🌸 The company's earnings have started to improve, and it is expected to be earnings positive this year after multiple years of losses.
• 😩 Snowflake may still be in a base due to its significant previous move and the need for time to wear off excessive optimism.
• 💄 Timing is essential when considering buying Snowflake's stock, and it is important to wait for confirmation signals before making a decision.

Questions & Answers

Q: Why is Snowflake still in a base after 16 months when other stocks have broken out?

Snowflake may still be in a base because of its previous significant move. Other stocks may have had different circumstances or timing for their breakouts. It is important to consider the stock's specific situation and performance.

Q: How are Snowflake's earnings and sales looking?

Snowflake's earnings have started to pick up, and it is expected to be earnings positive this year after several years of losses. Its sales and earnings have shown consistent growth, which is a positive sign for the company's future prospects.

Q: Should investors consider buying Snowflake's stock at its current price?

It would be more ideal for the stock to tighten up or consolidate for a week before considering a buy. Waiting for the stock to close near its high would also provide more confirmation. However, individual investors should conduct thorough research and analysis before making any investing decisions.

Q: What is the IPO history of Snowflake and how does it play into the stock's current performance?

Snowflake's IPO initially priced the shares at $120, and it experienced a significant surge similar to some IPOs during the late 1999 tech bubble. However, Snowflake had real sales and potential, unlike many other IPOs. The stock may need time to wear off excessive optimism and start reporting positive earnings consistently.

Summary & Key Takeaways

• Snowflake's stock is currently in a flat base and has been going back and forth in its price action.

• The stock had a strong move from $140 to $200 in October. It is normal for it to consolidate before making another move.

• Other stocks in the same sector have already broken out, but Snowflake may still be in a base due to its significant previous move.