I don’t remember ever seeing that on one of my Morningstar reports before that said the stock (SNOW) was actually significantly below the fair value.
Wow! Just when I said that, I got another Morningstar report on Datadog that says: Stock Price $142, Fair Value $192 !!!
We are raising our fair value estimate for Datadog to $192 from $153 after the firm closed out fiscal 2021 with results above our expectations. We are also revising growth estimates as the company exceeded our expectations on penetration in the enterprise market. We continue to have a positive outlook on the company as it benefits from secular tailwinds while executing strongly.
So what happened is that previously the stock price was at $175 to $195, and Morningstar’s fair value was apparently $153, so, as I said, I was always getting reports saying “overvalued”.
Now, as the stock prices were falling to ridiculous levels for no particular reason except perhaps sector rotation, Morningstar’s fair value estimates were going up based on actual company results, and the Fair Value estimates and the stock price passed each other going in opposite directions (even for a super conservative analyzing company like Morningstar).
I suspect that this is what has happened to most of our companies: they are just plain massively oversold.
The analyst report is nine pages, and I only gave you one little paragraph.
This is really OT so if you feel you must contact me, please do it off board.
I hope that this is useful to you.