At this point, everyone knows there are a lot of stocks trading at a premium valuation. And not all of them will be able to keep it up. It’s why investors get nervous when they see the Nasdaq Composite Index trading for a price-to-sales (P/S) ratio double what it was when the market peaked in 2007.
But just because a stock is expensive doesn’t mean it isn’t justified. Take Snowflake (NYSE:SNOW), for instance. It trades at almost 100 times sales. The company’s cloud-native data platform allows customers to consolidate their data into a single source, dumping the inefficiencies associated with traditional silos. And customers can’t get enough. As it prepares to report its fiscal second-quarter earnings this week, here are three things I’m eager to find out.
