ClearBridge Investments: “Snowflake (SNOW) has Significant Room for Free Cash Flow Margin Expansion”

ClearBridge Investments, an investment management firm, published its “Aggressive Growth Strategy” second quarter 2022 investor letter – a copy of which can be downloaded here. The ClearBridge Aggressive Growth Strategy outperformed its Russell 3000 Growth Index benchmark in the second quarter. On an absolute basis, the Strategy had losses across the eight sectors in which it was invested (out of 11 sectors total). The primary detractors were in the IT and communication services sectors. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, ClearBridge Aggressive Growth Strategy mentioned Snowflake Inc. (NYSE:SNOW) and explained its insights for the company. Founded in 2012, Snowflake Inc. (NYSE:SNOW) is a Bozeman, Montana-based cloud computing–based data warehousing company with a $51.6 billion market capitalization. Snowflake Inc. (NYSE:SNOW) delivered a -52.07% return since the beginning of the year, while its 12-month returns are down by -40.60%. The stock closed at $162.37 per share on August 03, 2022.

Here is what ClearBridge Aggressive Growth Strategy has to say about Snowflake Inc. (NYSE:SNOW) in its Q2 2022 investor letter:

Snowflake operates a cloud-based data platform for small and medium-sized businesses and enterprise customers. The company is a key beneficiary of software spending moving to the cloud, as well as the increasing strategic importance of data. With the potential to address the large and growing market for data cloud, a roughly $250 billion plus opportunity by 2026, we see a long runway for growth ahead. Although the company is already profitable, we believe Snowflake still has significant room for free cash flow margin expansion.”

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Our calculations show that Snowflake Inc. (NYSE:SNOW) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Snowflake Inc. (NYSE:SNOW) was in 81 hedge fund portfolios at the end of the second quarter of 2022, compared to 84 funds in the previous quarter. Snowflake Inc. (NYSE:SNOW) delivered a -12.70% return in the past 3 months. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

Disclosure: None. This article is originally published at Insider Monkey.