This pie looks very tempting,

2022-05-20

This pie looks very tempting, but I had to HOLD myself and dare not to touch it for the past few months.[LOL]

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{"i18n":{"language":"en_US"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":9021614752,"tweetId":"9021614752","gmtCreate":1653043625676,"gmtModify":1676535213677,"author":{"id":4095370255462710,"authorId":4095370255462710,"authorIdStr":"4095370255462710","name":"tobe.....","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[],"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p>This pie looks very tempting, but I had to&nbsp;HOLD myself and dare not to touch it for the past few months.<span>[LOL]&nbsp;</span></p></body></html>","htmlText":"<html><head></head><body><p>This pie looks very tempting, but I had to&nbsp;HOLD myself and dare not to touch it for the past few months.<span>[LOL]&nbsp;</span></p></body></html>","text":"This pie looks very tempting, but I had to HOLD myself and dare not to touch it for the past few months.[LOL]","highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/9021614752","repostId":2236030678,"repostType":4,"repost":{"id":"2236030678","pubTimestamp":1653036810,"share":"https://www.laohu8.com/m/news/2236030678?lang=&edition=full","pubTime":"2022-05-20 16:53","market":"us","language":"en","title":"Palantir: Complete Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=2236030678","media":"Seeking Alpha","summary":"So, Palantir Technologies Inc. (NYSE:PLTR) stock has been a total disaster for longs. Many retail \"b","content":"<html><head></head><body><p>So, <a href=\"https://laohu8.com/S/PLTR\">Palantir Technologies Inc.</a> (NYSE:PLTR) stock has been a total disaster for longs. Many retail &#34;bag-holders&#34; out there. And we would like to point out that we were wrong in our last column on the stock, despite making our members money. In our last column we predicted it would be emerging from the ashes and put out a profitable short-term trade recommendation in that piece. Winning.</p><p>However, <i>we were also wrong</i>, because we thought the bottom was put in after it reset back to trade just about at its direct public offering price. <i>We got that part wrong</i>.</p><p>While we get the win on the trade, we recognize that investors are getting creamed. Unfortunately this is a trader&#39;s market right now, and we have had a short bias the last few months, with selective long-term plays only in the most quality of names. We hate to see investors lose money, and we know it can be painful. The question is, what can we expect going forward. Is all hope lost here? We keep hearing that that technology stocks, especially those that are potential game-changing names, are on sale. But are they?</p><p>Names like Palantir are indeed often extremely expensive in the early stages. You really cannot value them on an earnings basis because there are no or very little earnings. Palantir also has a massive dilution problem, which means consistent positive EPS gets kicked further down the road. We think Palantir has a lot of potential, but this market is beyond unforgiving to those companies that do not make money or have sky high valuations. It does not matter at all how much promise they have; the stocks are all down and down massively. What can you do? We think there are three possible courses of action in the disaster that has been Palantir, all of which are correct.</p><p>The first option is the easiest, and perhaps a &#34;cop out&#34; for lack of a better term. But that option is to simply avoid the stock altogether in favor of deep value names offering some yield protection and are still managing to grow. We would not short down here at $7-$8, as the stock really has been pounded. The risk-reward is not favorable on a short after all of the action. So, you could do nothing and just watch it. If you own the stock, that would be a simple hold then. You could consider selling some upside calls on big bounces to lower cost basis if you choose.</p><p>The second course of action is in our wheelhouse. And that is to trade the name. Right now, we think that $7 level is a buy for gains to be sold at $8-$9, maybe $10. But this market environment is not going to get any better for innovative tech in the near-term. You could then consider some put options or mild shorts if the stock does enjoy a sizable bounce from the oversold conditions.</p><p>The third option is likely where a lot of readers are interested, and that is simply invest in the name, not obsess over the day-to-day tick in price. Add selectively to a well-rounded portfolio to improve cost basis, and put faith in management that it can deliver on growing the business profitably without diluting shareholders into oblivion. Right now this is a tall order for this company and management. While operationally the company is growing sufficiently, management has some credibility issues. What <a href=\"https://laohu8.com/S/AONE.U\">one</a> has to do is determine if what the company offers will solve enough headaches for customers that eventually the growing sales turn into sustained and growing profits.</p><p>For years, Palantir may lose money or breakeven. Of course, the theory goes that companies like this will lose money as they spend to attract customers and build their moat. They invest heavily in their growth while seeing revenues increase dramatically. And as we know, Palantir is seeing revenues grow tremendously.</p><p>So, what is our take? We think you wait for the next down day in the stock. It has enjoyed a sizable relief bounce from the lows, but we believe the stock will retest these lows as the economy continues to worsen, rates are going up, and markets struggle. We would be both traders and investors at $7. The risk could be that Palantir&#39;s growth fades and the company never really transforms the world. New competitors could emerge. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. We hate to say it but frankly, it is not uncommon for stocks in seemingly innovative companies to wither away to sub $1 then eventually delist because the company failed to grow and deliver on its plans.</p><p>Although we were wrong in that bottom call, operationally we are seeing some positive signs. Internal metrics improve year-after-year for Palantir and we see no reason why the ongoing growth will not eventually lead to real profits, other than dilution. We admit and accept that so many great companies start out losing money. While the Russia/Ukraine conflict was a seemingly bullish development as it highlights a need to mine data for intelligence, some see a limited benefit for Palantir. For the long-term investor, we like a buy in this stock on weakness that sends the stock lower. While it will still be expensive, even for high growth tech, it will be much more reasonable compared to a few months ago. And it is not like the company is bleeding out and losing money hand over first. Palantir is breaking even and making some money some quarters.</p><h2>Palantir&#39;s Government and Commercial sectors showing growth</h2><p>In the just reported quarter, performance was strong on the top line and ahead of consensus estimates. Total revenue grew 31% year-over-year to $446 million, beating estimates by almost $3 million. However, its profitability was lower than expected by $0.02, and worse, guidance was less than consensus. That crushed the stock. But that said, both segments are doing well.</p><p>Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results are likely to get a big boost following international strife. While the war in Ukraine may or may not lead to more business the company has invested in itself to grow sales. There are some concerns with backlog, but as we previously covered, Palantir has been hiring.</p><p>Palantir has expanded its sales team and they have been working to secure new orders. However, the Government revenues have slowed their growth somewhat. Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. They rose 16% from last year, and the company added a total of 40 net new customers in the quarter, which is very positive, 3 on the government side and 37 on the commercial side. We think it is important to note that the commercial space is doing well. The commercial revenue is expanding rapidly, increasing 132% in 2021, and here in Q1, it rose 54% year-over-year.</p><p>Palantir is seeing very positive momentum in its margins as well. Positive movement in margins is important in a software company as it really highlights strengths, or weaknesses, in the way it distributes its products. Palantir is delivering. Adjusted gross margin was 81%. Contribution margin was 57%. First quarter adjusted income from operations, excluding stock-based compensation and related employer payroll taxes was $117 million, representing an adjusted operating margin of 26%, ahead of management&#39;s prior guidance of 23%. This is positive.</p><h2>Palantir is slightly profitable, for now</h2><p>Despite the pull back now to single-digits, the stock is actually still expensive, like so many other growth tech names. The company lost $39 million in the quarter operationally, but adjusted income from operations was $117 million. The company is still free cash flow positive. Adjusted free cash flow was $30 million for the quarter. That said, the company was profitable at a $0.02 adjusted EPS bottom line figure, but this missed estimated by $0.02, so that is a negative, and another reason the stock is down.</p><p>We say the company is profitable for now for two reasons. First, there is a ton of stock based-compensation. This has been discussed in the past but we have to reiterate that we like that management has acknowledged that it is a problem. Still, it is ongoing, and every share that is issued waters down the ability to increase EPS. In short, shareholders could be diluted into losses. The second reason is that although there is growth internationally, as well as big gains in the U.S., we could see the government and companies slash spending if there is a recession. Each week, things seem to get worse in terms of how expensive things are, and corporate earnings reports continue to highlight the tremendous pressure inflation is putting on them. While Palantir&#39;s technology should help governments and businesses alike operate more efficiently, and therefore more profitably, we could see reduced spending on services like this.</p><h2>Still expensive</h2><p>On the valuation front, the stock is still pricey. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 50X. Very pricey. Perhaps the more appropriate measure is the price-to-sales ratio, but not only is this still very high, the market has basically said it is no longer willing to pay for sky high multiples. Keep that in mind. At 9X sales, the stock is much cheaper than it has ever been, but it is still not &#34;cheap&#34;. We would highlight that the PEG ratio is reasonable and we like the cash flow metrics.</p><h2>The outlook is murky</h2><p>The biggest concern right now is not valuation. It is not dilution. It is not the &#34;overall market.&#34; The largest issue is a slowdown in performance. The Q2 guidance was pretty weak. The company perhaps is underpromising to overdeliver, by management guided to a base case of $470 million in revenue. This was below consensus of $484 million. However in the release management noted that &#34;there is a wide range of potential upside to [the] guidance.&#34; The one positive factor to highlight is that Palantir continues to see 30% annual revenue growth through 2025.</p><h2>Take home</h2><p>The company operates with no debt and has nice positive free cash flow. They are poised to benefit from strong secular trends in big data and using analytics to improve operations. In the short-term, it is painful. Long-term, minus the dilution issues, there is a lot of promise here for future profits. The customer growth is impressive as is the revenue growth. While the stock has been a disaster, man analysts have price targets implying massive upside. We continue to see ongoing rapid growth in the U.S., but do caution that a big economic slowdown could hurt government and commercial spending. All things considered, on the next drawdown we would be buyers.</p></body></html>","collect":0,"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: Complete Disaster</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: Complete Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-05-20 16:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4513287-palantir-complete-disaster><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been a total disaster for longs. Many retail \"bag-holders\" out there. And we would like to point out that we were wrong in our last column on the ...</p>\n\n<a href=\"https://seekingalpha.com/article/4513287-palantir-complete-disaster\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"PLTR":"Palantir Technologies Inc."},"source_url":"https://seekingalpha.com/article/4513287-palantir-complete-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2236030678","content_text":"So, Palantir Technologies Inc. (NYSE:PLTR) stock has been a total disaster for longs. Many retail \"bag-holders\" out there. And we would like to point out that we were wrong in our last column on the stock, despite making our members money. In our last column we predicted it would be emerging from the ashes and put out a profitable short-term trade recommendation in that piece. Winning.However, we were also wrong, because we thought the bottom was put in after it reset back to trade just about at its direct public offering price. We got that part wrong.While we get the win on the trade, we recognize that investors are getting creamed. Unfortunately this is a trader's market right now, and we have had a short bias the last few months, with selective long-term plays only in the most quality of names. We hate to see investors lose money, and we know it can be painful. The question is, what can we expect going forward. Is all hope lost here? We keep hearing that that technology stocks, especially those that are potential game-changing names, are on sale. But are they?Names like Palantir are indeed often extremely expensive in the early stages. You really cannot value them on an earnings basis because there are no or very little earnings. Palantir also has a massive dilution problem, which means consistent positive EPS gets kicked further down the road. We think Palantir has a lot of potential, but this market is beyond unforgiving to those companies that do not make money or have sky high valuations. It does not matter at all how much promise they have; the stocks are all down and down massively. What can you do? We think there are three possible courses of action in the disaster that has been Palantir, all of which are correct.The first option is the easiest, and perhaps a \"cop out\" for lack of a better term. But that option is to simply avoid the stock altogether in favor of deep value names offering some yield protection and are still managing to grow. We would not short down here at $7-$8, as the stock really has been pounded. The risk-reward is not favorable on a short after all of the action. So, you could do nothing and just watch it. If you own the stock, that would be a simple hold then. You could consider selling some upside calls on big bounces to lower cost basis if you choose.The second course of action is in our wheelhouse. And that is to trade the name. Right now, we think that $7 level is a buy for gains to be sold at $8-$9, maybe $10. But this market environment is not going to get any better for innovative tech in the near-term. You could then consider some put options or mild shorts if the stock does enjoy a sizable bounce from the oversold conditions.The third option is likely where a lot of readers are interested, and that is simply invest in the name, not obsess over the day-to-day tick in price. Add selectively to a well-rounded portfolio to improve cost basis, and put faith in management that it can deliver on growing the business profitably without diluting shareholders into oblivion. Right now this is a tall order for this company and management. While operationally the company is growing sufficiently, management has some credibility issues. What one has to do is determine if what the company offers will solve enough headaches for customers that eventually the growing sales turn into sustained and growing profits.For years, Palantir may lose money or breakeven. Of course, the theory goes that companies like this will lose money as they spend to attract customers and build their moat. They invest heavily in their growth while seeing revenues increase dramatically. And as we know, Palantir is seeing revenues grow tremendously.So, what is our take? We think you wait for the next down day in the stock. It has enjoyed a sizable relief bounce from the lows, but we believe the stock will retest these lows as the economy continues to worsen, rates are going up, and markets struggle. We would be both traders and investors at $7. The risk could be that Palantir's growth fades and the company never really transforms the world. New competitors could emerge. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. We hate to say it but frankly, it is not uncommon for stocks in seemingly innovative companies to wither away to sub $1 then eventually delist because the company failed to grow and deliver on its plans.Although we were wrong in that bottom call, operationally we are seeing some positive signs. Internal metrics improve year-after-year for Palantir and we see no reason why the ongoing growth will not eventually lead to real profits, other than dilution. We admit and accept that so many great companies start out losing money. While the Russia/Ukraine conflict was a seemingly bullish development as it highlights a need to mine data for intelligence, some see a limited benefit for Palantir. For the long-term investor, we like a buy in this stock on weakness that sends the stock lower. While it will still be expensive, even for high growth tech, it will be much more reasonable compared to a few months ago. And it is not like the company is bleeding out and losing money hand over first. Palantir is breaking even and making some money some quarters.Palantir's Government and Commercial sectors showing growthIn the just reported quarter, performance was strong on the top line and ahead of consensus estimates. Total revenue grew 31% year-over-year to $446 million, beating estimates by almost $3 million. However, its profitability was lower than expected by $0.02, and worse, guidance was less than consensus. That crushed the stock. But that said, both segments are doing well.Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results are likely to get a big boost following international strife. While the war in Ukraine may or may not lead to more business the company has invested in itself to grow sales. There are some concerns with backlog, but as we previously covered, Palantir has been hiring.Palantir has expanded its sales team and they have been working to secure new orders. However, the Government revenues have slowed their growth somewhat. Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. They rose 16% from last year, and the company added a total of 40 net new customers in the quarter, which is very positive, 3 on the government side and 37 on the commercial side. We think it is important to note that the commercial space is doing well. The commercial revenue is expanding rapidly, increasing 132% in 2021, and here in Q1, it rose 54% year-over-year.Palantir is seeing very positive momentum in its margins as well. Positive movement in margins is important in a software company as it really highlights strengths, or weaknesses, in the way it distributes its products. Palantir is delivering. Adjusted gross margin was 81%. Contribution margin was 57%. First quarter adjusted income from operations, excluding stock-based compensation and related employer payroll taxes was $117 million, representing an adjusted operating margin of 26%, ahead of management's prior guidance of 23%. This is positive.Palantir is slightly profitable, for nowDespite the pull back now to single-digits, the stock is actually still expensive, like so many other growth tech names. The company lost $39 million in the quarter operationally, but adjusted income from operations was $117 million. The company is still free cash flow positive. Adjusted free cash flow was $30 million for the quarter. That said, the company was profitable at a $0.02 adjusted EPS bottom line figure, but this missed estimated by $0.02, so that is a negative, and another reason the stock is down.We say the company is profitable for now for two reasons. First, there is a ton of stock based-compensation. This has been discussed in the past but we have to reiterate that we like that management has acknowledged that it is a problem. Still, it is ongoing, and every share that is issued waters down the ability to increase EPS. In short, shareholders could be diluted into losses. The second reason is that although there is growth internationally, as well as big gains in the U.S., we could see the government and companies slash spending if there is a recession. Each week, things seem to get worse in terms of how expensive things are, and corporate earnings reports continue to highlight the tremendous pressure inflation is putting on them. While Palantir's technology should help governments and businesses alike operate more efficiently, and therefore more profitably, we could see reduced spending on services like this.Still expensiveOn the valuation front, the stock is still pricey. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 50X. Very pricey. Perhaps the more appropriate measure is the price-to-sales ratio, but not only is this still very high, the market has basically said it is no longer willing to pay for sky high multiples. Keep that in mind. At 9X sales, the stock is much cheaper than it has ever been, but it is still not \"cheap\". We would highlight that the PEG ratio is reasonable and we like the cash flow metrics.The outlook is murkyThe biggest concern right now is not valuation. It is not dilution. It is not the \"overall market.\" The largest issue is a slowdown in performance. The Q2 guidance was pretty weak. The company perhaps is underpromising to overdeliver, by management guided to a base case of $470 million in revenue. This was below consensus of $484 million. However in the release management noted that \"there is a wide range of potential upside to [the] guidance.\" The one positive factor to highlight is that Palantir continues to see 30% annual revenue growth through 2025.Take homeThe company operates with no debt and has nice positive free cash flow. They are poised to benefit from strong secular trends in big data and using analytics to improve operations. In the short-term, it is painful. Long-term, minus the dilution issues, there is a lot of promise here for future profits. The customer growth is impressive as is the revenue growth. While the stock has been a disaster, man analysts have price targets implying massive upside. We continue to see ongoing rapid growth in the U.S., but do caution that a big economic slowdown could hurt government and commercial spending. All things considered, on the next drawdown we would be buyers.","news_type":1},"isVote":1,"tweetType":1,"viewCount":274,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"upFlag":false,"length":88,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/9021614752"}