Palantir: Butchered But Still Growing Rapidly

seekingalpha2022-05-30

SummaryPalantir was founded with investment from the CIA and has major customers including the US Army, Airbus, the Royal Navy, Morgan Stanley, and more.The stock has plummeted by over 67% since ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

YueShan
2022-05-31
YueShan
Will be better
ckmtan
2022-05-30
ckmtan
Go long for Palantir!
Nanamoney
2022-05-30
Nanamoney
Going rapidly but share price going down. What is the use.
VivianChua
2022-05-30
VivianChua
Need patience 💚
AuntieAaA
2022-05-30
AuntieAaA
OK
angkw
2022-05-30
angkw
Thanks for sharing

Leave a comment

176

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2239141089?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2022-05-30 10:11","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2239141089","market":"us","top_or_hot":-1,"title":"Palantir: Butchered But Still Growing Rapidly","media":"seekingalpha","content":"<div>\n<p>SummaryPalantir was founded with investment from the CIA and has major customers including the US Army, Airbus, the Royal Navy, Morgan Stanley, and more.The stock has plummeted by over 67% since ...</p>\n\n<a href=\"https://seekingalpha.com/article/4515153-palantir-butchered-but-still-growing-rapidly\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Palantir: Butchered But Still Growing Rapidly</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPalantir: Butchered But Still Growing Rapidly\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-05-30 10:11 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4515153-palantir-butchered-but-still-growing-rapidly><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryPalantir was founded with investment from the CIA and has major customers including the US Army, Airbus, the Royal Navy, Morgan Stanley, and more.The stock has plummeted by over 67% since ...</p>\n\n<a href=\"https://seekingalpha.com/article/4515153-palantir-butchered-but-still-growing-rapidly\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"PLTR","symbol_name":"Palantir Technologies Inc.","start_time":0,"source_url":"https://seekingalpha.com/article/4515153-palantir-butchered-but-still-growing-rapidly","article_id":"2239141089","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2239141089","pubTimestamp":1653876668,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"SummaryPalantir was founded with investment from the CIA and has major customers including the US Ar","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"PLTR":"Palantir Technologies Inc."},"translate_title":"Palantir：被屠宰但仍在快速增长","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PLTR":1},"content_text":"SummaryPalantir was founded with investment from the CIA and has major customers including the US Army, Airbus, the Royal Navy, Morgan Stanley, and more.The stock has plummeted by over 67% since October 2021, mainly due to high expectations and rising interest rates.While customer count has grown by 86% year over year.Michael Vi/iStock Editorial via Getty ImagesPalantir (NYSE:PLTR) is a leading software company which focuses on the analysis of big data. They were founded in 2003 by PayPal co-founder Peter Thiel and Alex Karp, who is the CEO today. The company was originally funded by the CIA and has been close partners with many leading government institutions. They went public in 2020 and skyrocketed to an incredible valuation of $21 billion. Since then, the stock price has plummeted by over 67%, mainly due to high wall street expectations and the rising interest rate environment. However, Palantir has increased their customer base by over 86% YoY, growing revenues and improving margins. The stock is also trading at a low valuation relative to historic multiples and is undervalued intrinsically based by the company's own estimates for growth. Let’s dive into the company’s business model, financials, and valuation to see if this stock offers Growth at a Reasonable Price (G.A.R.P).Data by YChartsBusiness ModelPalantir is a software company which gives organizations and government institutions the ability to unlock siloed data, analyze big data sets and make better, faster decisions. The company’s technology was originally used by the CIA to assist with “terrorist hunting” across the globe. After an investment from the CIA, they began to branch out to other major customers including the US Army, Airbus ((OTCPK:EADSF)(OTCPK:EADSY)), the Royal Navy, Morgan Stanley (MS) and more. The company operates with three core platforms, which include the following;1. FoundryThis is referred to as “The Operating System for the Modern Enterprise ''. The platform enables companies to bring together vast data sets from business intelligence, real time production data and CRM data. This also includes the development of “digital twins” which are great ways for manufacturing companies to visualize operations and see the impact of changes. Palantir has recently announced a new deal for their Foundry platform with Stellantis (STLA), the global auto manufacturer which makes Fiat, Chrysler, Dodge, Alpha Romeo and more.Palantir Foundry (Palantir)2. GothamThis is referred to as “The Operating System for Global Decision Making”. This allows complex situations with multiple entities to be simulated with real time data feeds to enable faster decisions. Their tagline “Thousands of Users, Millions of Sensors, A Single Pane of Glass.” sums up the platform as a single dashboard to monitor operations.A poignant example of their platform in action is with the US Army. The platform enables real time data to be captured of both allied forces and rival forces. This can then be analyzed with AI and displayed accurately to everyone who needs to see this as a method to help avoid wars and also perform better should conflict occur. Palantir Military Applications (Palantir)3. ApolloApollo is a platform for managing production software across the major companies including Airbus, Hyundai, Rio Tinto and of course the US Army.The company has recently announced a plethora of new products since going public. This includes edge AI which is great for the growing IoT (Internet of Things) market which grew by 22% in 2021 alone.Palantir new products (Investor presentation)Palantir has increased their commercial customer count by 207% and added 37 of these customers in Q12022 alone. They have a 124% net dollar retention rate, which is great to see as it means customers are staying with the company and spending more. For example, they recently closed a £10 million expansion with the UK Royal Navy. This offering started with strategic workforce planning and now includes supply chain management.Commercial Customers (Investor presentation)Founder ManagementPalantir's CEO and Founder is the unconventional Alex Karp, he has a law doctorate from Stanford where he met his Co-Founder (Peter Thiel) who was the Co-Founder of PayPal and was the first major investor into Facebook (FB). Peter Thiel still owns 7% of the company but is not involved in the day-to-day operations.CEO Alex Karp is the main figurehead and also a Doctor of Philosophy with a net worth of approximately $850 million. The fact that Karp is independently wealthy really is testament to his mission driven focus on creating a great company. He currently still has \"Skin in the game\" and owns 2.58% of shares.Growing FinancialsPalantir has had bullish expectations of over 50% revenue growth baked into the stock since their IPO and now their share price has been butchered as a result, after the company reported a slowdown in business. But despite the bloodbath, Palantir grew revenues to $1.5 billion for FY21, up 41% year over year, which is actually great for any company with \"normal\" expectations.In the trailing 12 months revenue increased by 31% year over year, which is also still good, but the declining growth rate is not what Wall Street likes to see. The good news is Palantir's Commercial revenue increased by 54% year over year and accelerated for the 5th quarter in a row. While US only commercial revenue increased by a rapid 136% year over year and accelerated for the 5th quarter in a row.Data by YChartsPalantir is operating a hefty net loss of -$498 million in trailing 12 months, but margins are improving. Their GAAP operating margin has increased from -39% in Q2 2021 to -9% by Q1 2022, which is a positive sign. While their adjusted operating margin is 26%. The company also produced $225 million in free cash flow in the trailing 12 months.Palantir Margins (Earnings report)Moving forward, Palantir is guiding for annual revenue growth of 30% or greater through 2025. They also have a strong balance sheet with $2.2 billion in cash and virtually no debt. The big data industry is forecasted to grow to $276 billion by 2026, Palantir's prime market position as a best in class provider should pave the way for continued growth. Their recent deal with Stellantis released just a few days ago could also be the start of other major carmakers jumping on board with Palantir.ValuationIn order to value Palantir I have plugged the latest financials into my valuation model, which uses the discounted cash flow method of valuation. I have forecasted revenue growth of 30% per year for the next 5 years, which is in line with the company's guidance. I have also forecasted margins to increase to 25% in the next 5 years as the company reaches a greater scale and their investments into R&D, Sales and Marketing start to pay off.Palantir Valuation (created by author Ben at Motivation 2 Invest)In addition, I have capitalised the company's R&D spend of $387 million in 2021, $560 million in 2020 and $305 million in 2019 in order to increase the accuracy of the valuation.Palantir stock valuation (created by author Ben at Motivation 2 Invest)Given these factors I get a fair value of $10 per share, the stock is currently trading at $7 per share and is thus 32% undervalued.If we analyse historic multiples, we can see the stock trades at an EV to EBITDA (forward) = 24.9, which is lower than the historic levels of over 90! While their Price to Sales Ratio has also compressed substantially from over 30 in 2021 to less than 8 at the time of writing.Data by YChartsPalantir is a fairly unique company in terms of its client base and software. Thus for comparison I have compared to B2B software companies such as Salesforce (CRM) (which owns Data Visualisation platform Tableau) and SAP (SAP). I have also included IT data monitoring software such as Splunk (SPLK) and Datadog (DDOG). From this comparison it is clear Palantir is trading midrange with an EV to EBITA = 24.9. It trades cheaper than the rapidly growing Datadog and Splunk, but more expensive than legacy enterprise SaaS companies such as Salesforce and SAP.Data by YChartsRisks:Stock based compensationPalantir is a highly regarded software company and must produce best in class software for its government and enterprise customer base. To accomplish this Palantir needs to hire the most talented people and pay them right. For a fast-growing company with no earnings the solution is stock based compensation. Palantir has paid employees of $732 million in stock compensation over the past year. This is a non-cash expense but still means existing shareholders can be diluted somewhat. Thus, investors should be aware of this long term as the trend is set to continue at this level at least until the company reaches sufficient scale.Revenue Growth ForecastsPalantir is now forecasting 30% revenue growth or greater through till 2025. In my eyes this is realistic, and conservative based upon their most revenue growth of over 41%. However, like all growth companies there is still a chance they may not hit these targets and that would cause the stock to correct down again. Personally, I think Palantir should have set expectations lower from their IPO and then beat expectations in order to keep Wall street happy.Insider SellingOver the last 6 months there have been three insider purchases but twelve stock sales by insiders. The stock count equals a net of -$746 million worth of shares sold which isn't great to see. This shows many insider investors were using the IPO as an opportunity to exit and cash out. This was expected but ideally now the stock has declined so much, I would like to see some more insiders buying shares.Final ThoughtsPalantir is a fantastic company which is truly at the cutting edge when it comes to advanced software and data analysis. The company's prestigious client base of government institutions and enterprises, gives them great traction for further growth. They have high retention rates and growing revenue signify the company's prospects are improving. In addition, the stock is undervalued relative to historic multiples. The macroeconomic environment of rising interest rates and inflation has caused Wall Street to be extra sensitive to \"growth stocks\" which could leave sentiment muted in the short term. However, longer term this stock looks like a great play on the trend of big data and increased global uncertainty.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9027361483,"gmtCreate":1653972370542,"gmtModify":1676535372107,"author":{"id":"3583033297199166","authorId":"3583033297199166","name":"YueShan","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":1,"idStr":"3583033297199166","authorIdStr":"3583033297199166"},"htmlText":"Will be better&nbsp;","listText":"Will be better&nbsp;","text":"Will be better","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9027361483","repostId":2239141089,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9024540663,"gmtCreate":1653891855752,"gmtModify":1676535358879,"author":{"id":"4107590982975840","authorId":"4107590982975840","name":"ckmtan","avatar":"https://community-static.tradeup.com/news/4b0c0b1aeb9fb3f7e9528c962f00637e","vip":1,"crmLevel":2,"crmLevelSwitch":1,"idStr":"4107590982975840","authorIdStr":"4107590982975840"},"htmlText":"Go long for Palantir!","listText":"Go long for Palantir!","text":"Go long for Palantir!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9024540663","repostId":2239141089,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9024523726,"gmtCreate":1653888743365,"gmtModify":1676535358462,"author":{"id":"3582942911161794","authorId":"3582942911161794","name":"Nanamoney","avatar":"https://static.tigerbbs.com/8624e691b889b8bc4515d1884744eb5a","vip":1,"crmLevel":4,"crmLevelSwitch":1,"idStr":"3582942911161794","authorIdStr":"3582942911161794"},"htmlText":"Going rapidly but share price going down. What is the use.&nbsp;","listText":"Going rapidly but share price going down. What is the use.&nbsp;","text":"Going rapidly but share price going down. What is the use.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9024523726","repostId":2239141089,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9024566438,"gmtCreate":1653887533924,"gmtModify":1676535358133,"author":{"id":"3580011914778910","authorId":"3580011914778910","name":"VivianChua","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":5,"crmLevelSwitch":1,"idStr":"3580011914778910","authorIdStr":"3580011914778910"},"htmlText":"Need patience 💚","listText":"Need patience 💚","text":"Need patience 💚","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9024566438","repostId":2239141089,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9024581495,"gmtCreate":1653885458317,"gmtModify":1676535357836,"author":{"id":"3583049143664216","authorId":"3583049143664216","name":"AuntieAaA","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3583049143664216","authorIdStr":"3583049143664216"},"htmlText":"OK","listText":"OK","text":"OK","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9024581495","repostId":2239141089,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9024583275,"gmtCreate":1653885320497,"gmtModify":1676535357806,"author":{"id":"3586394751812463","authorId":"3586394751812463","name":"angkw","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3586394751812463","authorIdStr":"3586394751812463"},"htmlText":"Thanks for sharing","listText":"Thanks for sharing","text":"Thanks for sharing","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9024583275","repostId":2239141089,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":176,"commentSize":21,"repostSize":0,"favoriteSize":4,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2239141089"}