SNOW Stock: Hyper Growth Drawing Investors

This May, the market saw some rather impressive downside volatility. Accordingly, growth stocks saw a selloff that brought the valuations of many top growth stocks down dramatically. Unfortunately, this price Read More... The post SNOW Stock: Hyper Growth Drawing Investors appeared first on TipRanks Financial Blog.

SNOW Stock: Hyper Growth Drawing Investors

This May, the market saw some rather impressive downside volatility. Accordingly, growth stocks saw a selloff that brought the valuations of many top growth stocks down dramatically. Unfortunately, this price action did not spare Snowflake (SNOW) from the madness.

However, since this short-term selloff, shares of SNOW stock have rebounded nicely. In fact, shares of this cloud computing player have rebounded approximately 70% from their bottom, just four months ago. Accordingly, long-term investors bullish on the prospects of this company continue to be rewarded by a buy and hold strategy.

The question many investors have is whether or not this momentum can continue. After all, growth stocks are almost all entirely valued at extremely high levels right now. Any one single catalyst could be the straw that breaks the camel's back. Or, at least, that's what bears are saying.

I remain bullish on SNOW stock for various reasons. Let's dive into a few reasons why investors may want to continue to be bullish on this stock as well. (See Snowflake stock charts on TipRanks)

SNOW Stock: Growth Play with Excellent Momentum

Since its gloomy mid-May performance, SNOW has recovered by 70% over these last four months. This dramatic incline higher has been boosted by a number of catalysts. While many investors note that this buying activity appears to be the result of a reversion of sentiment toward a more bullish long-term mean, it's important to keep in mind that these cloud computing stocks can see volatility from time to time.

For now, the momentum with SNOW stock appears to be broadly bullish. For investors who have held this stock for some time, that's a great thing. However, for those who may have missed the dip, these gains can be excruciating to watch, as another entry point may be hard to find, moving forward.

The company's recent strong earnings have propelled this stock higher. The cloud computing player has seen a rebound in top line growth, with expectations that bottom line profitability will come soon. This has resulted in Snowflake regaining its $300 per share level - a level which may not be broken again to the downside for some time, if this momentum continues.

That said, momentum works in both directions. Investors bullish on SNOW stock should remember what happened during previous negative momentum rallies to the downside. This is a highly-valued stock with more room to fall than other value plays in a bear market. Accordingly, investors always need to remember to hold such stocks in a well-diversified portfolio.

That said, in terms of Snowflake's long-term prospects, there's reason to be bullish. This is a stock with the potential to really outperform in a market with positive momentum. Many analysts point out that Snowflake is more flexible, cost-effective and scalable than its rivals. Accordingly, it's clear investors are on the same page with this analysis.

Strong Second Quarter Earnings 

As mentioned, Snowflake's recent earnings really were quite strong. The company's second quarter earnings showed triple-digit revenue growth to $255 million. However, the company's third quarter earnings reported even higher triple-digit growth (104% vs. 103% in the previous quarter), to $272 million.

In other words, this company isn't only blowing out earnings expectations, it's accelerating its earnings over time. That's extremely impressive.

Analysts predicted strong revenue growth, but nothing on this scale. From a top line perspective, SNOW stock earnings deserve gold stars.

However, this growth has come at a price. Snowflake is not yet profitable, and has missed on its bottom line in the past. This past quarter, the company lost $0.64 per share, versus analyst estimates of $0.15 per share. While that's not good, it's expected that higher revenue growth along with market share growth will bode well for this company over the long-term.

Investors aren't buying this stock because it's profitable today. Rather, they're banking on Snowflake being able to capture way more of the market over time.

Analysts’ Take on SNOW Stock

TipRanks’ analyst rating suggests that Snowflake is a Moderate Buy. Out of 19 ratings, there are 9 Buy recommendations and 10 Hold recommendations. 

The average Snowflake price target is $317.80. Analyst price targets range from a low of $275 per share to a high of $375 per share. 

Bottom Line

Looking at the numbers, SNOW stock is one that is certainly enticing. While this company remains a hyper-growth stock, and has been blowing away its top-line expectations, perhaps investors will demand a path to profitability soon. In that sort of scenario, some downside could materialize.

However, as long as momentum remains bullish in the market and investors value growth over earnings, this is a stock that is likely to continue to do well. These sorts of growth rates are hard to find in the market today. Accordingly, Snowflake is a stock that remains one of the top growth options for investors right now, and for good reason.

Disclosure: At the time of publication, Chris MacDonald did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

The post SNOW Stock: Hyper Growth Drawing Investors appeared first on TipRanks Financial Blog.

Source : Tip Ranks More   

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GOEV Stock – EV Company of the Future?

Canoo Inc. (GOEV) is a Los-Angeles based mobility technology firm focused on designing, engineering, developing, and manufacturing EVs for both commercial and private purposes. The company uses skateboard architecture technology Read More... The post GOEV Stock – EV Company of the Future? appeared first on TipRanks Financial Blog.

GOEV Stock – EV Company  of the Future?

Canoo Inc. () is a Los-Angeles based mobility technology firm focused on designing, engineering, developing, and manufacturing EVs for both commercial and private purposes. The company uses skateboard architecture technology to manufacture B2B delivery vehicles and lifestyle vehicles along with multipurpose delivery vehicles in the United States. Canoo’s modular electric platform is built to deliver maximum interior space in vehicles. 

Additionally, the company includes a range of vehicle applications for both businesses and individuals. These factors have made Canoo an intriguing speculative bet in the EV space.

Currently, I'm somewhat bearish on GOEV stock. (See Canoo Inc. stock charts on TipRanks)

Volatile EV market

One of the reasons for this stance is the volatility of the EV market. Since the onset of the pandemic, EV stocks have surged and dropped to a degree that makes many investors uncomfortable. Indeed, like other EV stocks, Canoo's valuation has become a point of contention among bears, with bulls noting that the company's long-term growth prospects make this valuation worthwhile.

That said, one of the key contributing factors to Canoo's volatile nature is simply the fact that this is a de-SPAC (special purpose acquisition company) company. The SPAC space has been ultra volatile of late, due to the speculative nature of companies that choose reverse mergers to go public.

Accordingly, GOEV stock has fluctuated between a massive range of $5.75 per share and nearly $25 per share over the past year. Currently, GOEV stock is trading near the lower end of this range, as bearish sentiment on this company builds.

Can Canoo come roaring back? Or is the music starting to stop? Let's dive in.

Key Catalysts for GOEV Stock

Perhaps the most bullish argument that can be made for GOEV stock is that this company is a potential short squeeze candidate. Simply because of the company's short interest of late, retail investors may want to take a gamble on this stock squeezing.

Such a stance is not insane. Other companies with low share prices, high short interest and borrow fee rates, and low floats, have squeezed in incredible fashion. However, the potential for GOEV stock to pick up the momentum necessary to initiate such a squeeze appears to be the problem.

Earlier this year, GOEV stock rallied by a whopping 35%, courtesy of Reddit users bidding for short-term play. In fact, nearly 33% of the company's floating shares were sold short.  

However, since then, sentiment on platforms such as Reddit group WallStreetBets has calmed down. Investors seem more concerned with the fact that Canoo has recorded no revenue and an operating loss of nearly $97 million, per its first-quarter results posted in May. However, Canoo did get a temporary boost, as it ended the quarter with $641 million in cash and cash equivalents.

In its Q2 report, the company recorded a wider-than-expected loss in the quarter but managed to generate 9,500 non-binding pre-orders. Moreover, loss from operations is also down by 426.8% year-over-year, while total assets took a blow of over $700 million, nearly a 6% fall year-over-year. Additionally, the company's net loss grew by approximately 385% to over $110 million.

Canoo's EBITDA loss of around $76 million was also up from $17.7 million during the same quarter in 2020. Further, Canoo also reported negative operating cash flows amounting to $108.8 million, along with around $565 million in cash.  

These are not bullish numbers at all.

The Bigger Picture for GOEV

According to Tony Aquila, CEO of GOEV, the company is planning to introduce sustainable and affordable vehicle options to the global market. This strategy takes time to enact, and investors shouldn't focus on recent results as indicative of what the future will hold.

On the other hand, Canoo has recently made two notable moves. First, Canoo has secured a manufacturing contract with VDL Nedcar. Secondly, the company has selected Oklahoma as the partner for the manufacturing plant.

Indeed, on the production front, Canoo has sourced 87% of its components at the end of the second quarter, 13 points higher year-over-year. When bulk materials are excluded, the company has sourced 95% of its manufacturing materials. These are good signs pointing to production commencing as planned.

Canoo is set to launch its first product in 2022, which the company will follow up with multipurpose delivery vehicles, along with pickup trucks. Aquila added that the company is looking to secure the company’s future and plans to focus on the fundamentals. Further, he claims that companies and stock prices do not always factor in positive events or catalysts.

The company is in a pre-revenue state and aligned with analyst expectations of revenues, hitting the $75 million mark in 2022. This would signify a price-to-sales multiple of over 25, considering the current market cap of around $2.15 billion.

Indeed, most fundamentals-oriented investors would say that's high. However, for a company with the growth potential of Canoo, perhaps this is reasonable. Time will tell.

What are Analysts saying about GOEV Stock?

As per TipRanks' analyst rating consensus, Canoo is a Hold. Out of 4 analyst ratings, there are 2 Buy recommendations, 1 Hold recommendation, and 1 Sell recommendation.

The stock has an average Canoo price target of $11.50, implying upside of 27.21%. Analyst price targets range from a high of $19 per share to a low of $5 per share.

Bottom Line

There's an intriguing bull and bear case to make with GOEV stock right now. Indeed, the EV sector is seeing higher levels of competition of late, making this space a more intriguing one to watch. However, picking the winners out of this early-stage pool is rather difficult.

Canoo is an intriguing option with impressive upside, but also holds extremely high risk right now. Accordingly, investors should size their positions accordingly when considering such speculative plays.

Disclosure: At the time of publication, Chris MacDonald did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

The post GOEV Stock – EV Company of the Future? appeared first on TipRanks Financial Blog.

Source : Tip Ranks More   

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