Why Snowflake Plunged 25.5% in May
Shares of Snowflake (NYSE: SNOW) plunged 25.5% in May, according to data from S&P Global Market Intelligence. The plunge was especially discouraging considering the cloud data lake provider had already fallen so much this year heading into the month. After this-month's decline, Snowflake is down 62% on the year and 67% below its all-time high.
The company reported earnings in May. While Snowflake beat expectations for revenue, it also continues to print losses, and its outlook for decelerating revenue, albeit off a very high rate, put its sky-high valuation into question.
As inflation and interest rates have stormed higher since the beginning of the year, growth-tech stocks have sold off hard. Despite relatively solid financial metrics, much of the cloud software industry came into this year with nosebleed price-to-sales ratios, with no room for error. Investors are coming around to see these stocks as overvalued.
Source Fool.com
