Critical Analysis: Snowflake (NYSE:SNOW) & Block (NYSE:SQ)

Snowflake (NYSE:SNOW) and Block (NYSE:SQ) are both large-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, valuation, earnings and profitability.

Insider and Institutional Ownership

65.1% of Snowflake shares are held by institutional investors. Comparatively, 70.4% of Block shares are held by institutional investors. 7.8% of Snowflake shares are held by insiders. Comparatively, 10.5% of Block shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Snowflake and Block’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Snowflake	-31.73%	-19.62%	-12.43%
Block	4.73%	5.24%	2.81%

Analyst Ratings

This is a summary of current ratings and price targets for Snowflake and Block, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Snowflake	1	11	26	0	2.66
Block	1	6	24	0	2.74

Snowflake presently has a consensus target price of $180.23, suggesting a potential upside of 5.37%. Block has a consensus target price of $91.18, suggesting a potential downside of 1.77%. Given Snowflake’s higher probable upside, research analysts plainly believe Snowflake is more favorable than Block.

Volatility & Risk

Snowflake has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, Block has a beta of 2.48, meaning that its stock price is 148% more volatile than the S&P 500.

Valuation & Earnings

This table compares Snowflake and Block”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Snowflake	$2.81 billion	20.43	-$836.10 million	($3.06)	-55.90
Block	$23.86 billion	2.41	$9.77 million	$1.78	52.15

Block has higher revenue and earnings than Snowflake. Snowflake is trading at a lower price-to-earnings ratio than Block, indicating that it is currently the more affordable of the two stocks.

Summary

Block beats Snowflake on 11 of the 14 factors compared between the two stocks.

About Snowflake

Snowflake Inc. provides a cloud-based data platform for various organizations in the United States and internationally. Its platform offers Data Cloud, which enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data and data products, as well as applies artificial intelligence (AI) for solving business problems. The company was formerly known as Snowflake Computing, Inc. and changed its name to Snowflake Inc. in April 2019. Snowflake Inc. was incorporated in 2012 and is based in Bozeman, Montana.

About Block

Square, Inc. provides payment and point-of-sale solutions in the United States and internationally. The company's commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions. It offers hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts EMV® chip cards and Near Field Communication payments; Chip card reader, which accepts EMV® chip cards and enables swiped transactions of magnetic stripe cards; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; and Square Register that combines its hardware, point-of-sale software, and payments technology, as well as managed payments solutions. The company also provides Square Point of Sale software; Cash App, which provides access to the financial system, allowing customers to electronically send, store, and spend money; Caviar, a food ordering platform for restaurants to offer food ordering, pickup and delivery, to their customers; and Square Capital that facilitates loans to sellers based on real-time payment and point-of-sale data. Square, Inc. was founded in 2009 and is headquartered in San Francisco, California.