Due to continuing digitization worldwide, experts predict that tech trends should dominate the market next year. Furthermore, as companies across industries invest significantly in technology upgrades, the tech industry should continue to thrive. Continuing advancements in the tech space should…
further propel the industry’s growth. Investors’ interest in the technology industry is evident in the iShares Global Tech ETF’s (IXN) 32.6% returns over the past year versus the SPDR S&P 500 ETF Trust’s (SPY) 27.3% gains.
But although the industry has been one of the top-performing industries this year, not all tech stocks are expected to continue advancing in price Snowflake Inc. (SNOW – Get Rating), Cloudflare, Inc. (NET – Get Rating), and MongoDB, Inc. (MDB – Get Rating) are currently trading at price levels that are not consistent with their weak growth prospects. So, we think it could be wise to avoid these overvalued stocks now.
Snowflake Inc. (SNOW – Get Rating)
Incorporated in 2012, SNOW is a San Mateo, Calif.-based cloud data platform provider that serves in the United States and internationally. The company’s platform offers Data Cloud, which enables customers to consolidate data to drive meaningful business insights, build data-driven applications, and share data. SNOW also provides financial services, healthcare and life sciences, and other public services.
SNOW’s revenues increased 109.5% year-over-year to $334.44 million in its fiscal third quarter, ended October 31, 2021. However, the company’s total operating expenses grew 41.4% from their year-ago value to $370.93 million. Its operating loss came in at $157.27 million. Also, the company’s net loss amounted to $154.86 million during the period.
SNOW’s EPS is expected to decrease marginally per annum in the next five years. The stock has declined 8.5% in price over the past month.
In terms of forward Price/Sales, SNOW is currently trading at 91.33x, 2137.2% higher than the 4.08x industry average. In addition, its 23.31x forward Price/Book is 300.2% higher than the 5.82x industry average.
SNOW’s POWR Ratings are consistent with this bleak outlook. The stock has an overall D rating, which equates to a Sell in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
Also, the stock has an F grade for Value and a D grade for Stability and Quality. We have also graded SNOW for Growth, Momentum, and Sentiment. Click here to access all of SNOW’s ratings. SNOW is ranked #61 of the 75 stocks in the D-rated Technology – Services industry.
Click here to check out our Cloud Computing Industry Report for 2021
Cloudflare, Inc. (NET – Get Rating)
NET is a cloud service provider that delivers a range of network services to businesses worldwide. The San Francisco-based company provides an integrated cloud-based security solution, including software-as-a-service applications. Application Security and Application Performance are the company’s product categories.
During the third quarter, ended September 30, 2021, NET’s revenue increased 51% year-over-year to $172.35 million. However…
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