1. Snowflake Inc. (NYSE: SNOW)
IPO Date: September 16, 2020
Number of Hedge Fund Holders: 70
Snowflake Inc. (NYSE: SNOW) tops our list of the best IPO stocks to buy now. It is a cloud platform that enables different organizations to mobilize their data with the company’s Data Cloud. Through the company’s software, the users can experience faster and easier processes of data storage, processing, and analytic solutions. Snowflake Inc. (NYSE: SNOW) has over 4,900 customers located worldwide.
In September 2020, Snowflake Inc. (NYSE: SNOW) raised over $3 billion in its IPO. The company went public at $120 and reached up to $300 on its first trading day, becoming the first company to double in value on its opening day. Snowflake Inc. (NYSE: SNOW) has a market capitalization of $88.1 billion. In Q2 2021, the company generated revenue of $272.2 million, presenting a 104% year-over-year growth. In August, Cowen lifted its price target on Snowflake Inc. (NYSE: SNOW) to $335, with an ‘Outperform’ rating on the shares. The firm appreciated the company’s strength across all the segments. Snowflake Inc. (NYSE: SNOW) gained 24.05% since its IPO.
As of Q2 2021, 70 hedge funds tracked by Insider Monkey have positions in Snowflake Inc. (NYSE: SNOW), worth $12.5 billion. Altimeter Capital Management is the company’s leading shareholder, with shares worth over $6.03 billion.
RiverPark Funds released its Q1 2021 investor letter and mentioned Snowflake Inc. (NYSE: SNOW) in it. Here is what the firm has to say:
“We also established a position in Snowflake during the quarter. Snowflake offers cloud-based data storage and analytics, generally termed “data warehouse-as-a-service.” The data warehousing market—created by the massive, growing amount of user, customer, and account data and the need to search and analyze it—has historically stored its data on physical servers located on-premises. The cloud data platform market—storing data off-premises on cloud servers—is a relatively new $70 billion+ market. Significantly, incremental warehouse data capacity and renewals are expected to be driven by and to the cloud, with more than 75% of databases in the cloud by 2022.
Snowflake requires absolutely no infrastructure management from its users, is fully scalable for each customer, runs on Amazon, Microsoft, or Google cloud platforms, and most critically, Snowflake helps companies analyze their data. The company also has a unique, customer-aligned billing model based on usage. All of which has led to Snowflake being among the leaders of this highly fragmented market, posting 124% revenue growth last year. SNOW’s growth comes from the combination of more customers—which grew 73% last year—and customers buying more services—the company boasts an amazing 150%+ net customer retention. The company’s growing scale has also led to increasing gross margin and operating leverage, up 1,100 basis points and 8,200 basis points, respectively, over the past two years. The company has guided to FCF break-even this year, and with the company’s capital expenditure-light model—Snowflake uses the public cloud for hosting—we expect FCF to grow much faster than revenue growth, which we forecast to grow comfortably more than 50% per year for the next several years. Additionally, we have great confidence in the SNOW management team, which previously had an enormously successful run guiding one of our other core Cloud software holdings ServiceNow.”
You can also take a look at 15 Largest Global IPOs of All Time and 15 Biggest IPOs of 2020.
