Snowflake and Uber market cap
Snowflake made about 264 million in revenue in 2019 whereas Uber made around 14 billion in revenue. Both companies are not profitable and despite Uber having ~70x the revenue the market cap of both these companies is almost the same. Snowflake’s revenue is growing much faster than Uber, but despite that I’m confused how it can be valued as high as Uber.
How about loss/revenue ratio?
Different types of companies are valued differently. All revenue is not same. Margins on selling software or services are much higher than margins or selling hardware or selling rides.
Having said that snowflake is still overvalued by around 2x, compared to similar companies..
Gross margin/profit is important.
Uber losing a billion every quarter lol, Snowflake has hardly spent a billion since it was born.
The way SNOW is holding up, Snowflakers still gonna be multi-millionaires when their lockup period ends!
Any idea when the lockup period generally expires for employees?
6m
Projected future profits....Uber doesnt have an obvious path to profitability.....though I dont know a lot about SNOW, my guess is people view it as having AWS like profitability potential...ie very high margins once they scale
Snowflake growth story: Enterprise software services has little no variable costs. Sell to more customers as cloud pie grows. Everyone cloud wins. Uber growth story: we need autonomous vehicles. Drivers are expensive. The latter is probably not here for another 10 years. The next cloud customer is just a dinner and a demo away.
Product vs Service. Snow flake is cloud subscription it has potential for 10X every year once they reach building full platform
Profit > revenue
Exactly! When you buy a stock, you’re buying ownership of a business. The point of a business is to make a profit. Revenue is only important to the extent that it effects profit potential. I’m shocked how many people don’t seem to understand that.
What does a random person who invests in a corporation get out of profit? Nothing. If you are 65 years old, you can invest in a profitable behemoth like a P&G or ATT to live off the dividends from profit. But what most investors benefit from is share price appreciation, which doesn’t require profit. Eventually a company needs some profit to keep operating but again, that’s later on down the road. A lot of these recently ipo’d growth companies are purposely not making a profit, all that would do is slow their growth. When you are in a new market, it’s almost mandatory to grab as much of that market as fast as possible. Cutting growth to focus on profit will slow theor land grab down. It’s a massive advantage to not have to worry about profit, allows new companies to move quick and usurp the slower moving legacy companies.
There is no valuation that makes sense anymore, honestly.