Palantir: Utter Disaster

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3

Palantir: Utter Disaster

Seeking Alpha2022-08-12

SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...

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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.

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zincy
·2022-08-14
Ok
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PrincessLow
·2022-08-14
Oh dear.
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Bspn
·2022-08-14
Ok
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Bustylibra
·2022-08-12
Nice
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Tanyl
·2022-08-12
PLTR cause me a big loss
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2
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UTOtrader
·2022-08-12
Sell
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川姐
·2022-08-12
Ok
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Otahman
·2022-08-12
Like pls
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3
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BhaskarB
·2022-08-12
Ok
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BhaskarB
·2022-08-12
Ok
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1
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BhaskarB
·2022-08-12
Ok
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rontol
·2022-08-12
Whatever happens, Peter Thiel is a happy man....damn happy i would say [Miser]
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Anzygart
·2022-08-12
People keep bidding it up regardless
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TaiJin
·2022-08-12
[Miser]
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Spaclover
·2022-08-12
T
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shaunlohloh
·2022-08-12
Good article
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AhBart
·2022-08-12
Nice explanation by author. Perhaps author should suggest a change of its CEO since company management has credibility issues.....high time to sweep the floor and do some spring cleaning 🧹 🧹
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SmithC
·2022-08-12
nice
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Edwardtoh
·2022-08-12
Nice
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Leisuretrade
·2022-08-12
ouch! the title says it all
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(NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[{"id":9999130933,"gmtCreate":1660485588624,"gmtModify":1676533478546,"author":{"id":"3571087482782759","authorId":"3571087482782759","name":"zincy","avatar":"https://static.tigerbbs.com/810acb95960865389c4db6baf838820b","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":1,"crmLevelSwitch":0},"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/9999130933","repostId":1190571853,"repostType":2,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9999904378,"gmtCreate":1660445880695,"gmtModify":1676533472125,"author":{"id":"4117417277253572","authorId":"4117417277253572","name":"PrincessLow","avatar":"https://community-static.tradeup.com/news/d4ea1cf001cc7d10ca250bb14e4a1509","vip":1,"crmLevel":2,"crmLevelSwitch":1},"htmlText":"Oh dear.&nbsp;","listText":"Oh dear.&nbsp;","text":"Oh dear.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9999904378","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9999084526,"gmtCreate":1660441050767,"gmtModify":1676533470410,"author":{"id":"3582502134655895","authorId":"3582502134655895","name":"Bspn","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0},"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/9999084526","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990802184,"gmtCreate":1660317348450,"gmtModify":1676533450390,"author":{"id":"3580382876614706","authorId":"3580382876614706","name":"Bustylibra","avatar":"https://static.tigerbbs.com/ee53d184a3c50326ddcb4185c2a74ccb","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"Nice&nbsp;","listText":"Nice&nbsp;","text":"Nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990802184","repostId":1190571853,"repostType":2,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990809230,"gmtCreate":1660316996821,"gmtModify":1676533450265,"author":{"id":"4087109808120260","authorId":"4087109808120260","name":"Tanyl","avatar":"https://static.tigerbbs.com/174329973340cf0f5b68791ee5b08afd","vip":1,"crmLevel":7,"crmLevelSwitch":1},"htmlText":"PLTR cause me a big loss","listText":"PLTR cause me a big loss","text":"PLTR cause me a big loss","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990809230","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990129443,"gmtCreate":1660312195884,"gmtModify":1676533449088,"author":{"id":"3574547619690492","authorId":"3574547619690492","name":"UTOtrader","avatar":"https://static.tigerbbs.com/82be6befb29ac8516e463638d3f659d5","vip":1,"crmLevel":4,"crmLevelSwitch":0},"htmlText":"Sell","listText":"Sell","text":"Sell","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990129443","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990129830,"gmtCreate":1660312167922,"gmtModify":1676533449072,"author":{"id":"3572316149124317","authorId":"3572316149124317","name":"川姐","avatar":"https://static.tigerbbs.com/28a87e149cd4b977f188b8ae3cb01bd8","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990129830","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990120725,"gmtCreate":1660312103369,"gmtModify":1676533449063,"author":{"id":"3567482716620513","authorId":"3567482716620513","name":"Otahman","avatar":"https://static.tigerbbs.com/dbd099972f177a5bb9c4f8a5666b4a77","vip":1,"crmLevel":6,"crmLevelSwitch":1},"htmlText":"Like pls","listText":"Like pls","text":"Like pls","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990120725","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990165221,"gmtCreate":1660311824265,"gmtModify":1676533448820,"author":{"id":"3576055655100541","authorId":"3576055655100541","name":"BhaskarB","avatar":"https://static.tigerbbs.com/ae63d5d863287dbf3e7d25ef9ab845e0","vip":1,"crmLevel":2,"crmLevelSwitch":0},"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/9990165221","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990165694,"gmtCreate":1660311817419,"gmtModify":1676533448816,"author":{"id":"3576055655100541","authorId":"3576055655100541","name":"BhaskarB","avatar":"https://static.tigerbbs.com/ae63d5d863287dbf3e7d25ef9ab845e0","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990165694","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990165398,"gmtCreate":1660311812116,"gmtModify":1676533448809,"author":{"id":"3576055655100541","authorId":"3576055655100541","name":"BhaskarB","avatar":"https://static.tigerbbs.com/ae63d5d863287dbf3e7d25ef9ab845e0","vip":1,"crmLevel":2,"crmLevelSwitch":0},"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/9990165398","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990166839,"gmtCreate":1660311542624,"gmtModify":1676533448762,"author":{"id":"4121302898886242","authorId":"4121302898886242","name":"rontol","avatar":"https://community-static.tradeup.com/news/470424ccea2343eb85c6ada08f877e9f","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"Whatever happens, Peter Thiel is a happy man....damn happy i would say&nbsp;[Miser]&nbsp;","listText":"Whatever happens, Peter Thiel is a happy man....damn happy i would say&nbsp;[Miser]&nbsp;","text":"Whatever happens, Peter Thiel is a happy man....damn happy i would say [Miser]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990166839","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990166317,"gmtCreate":1660311537942,"gmtModify":1676533448758,"author":{"id":"4087708380401170","authorId":"4087708380401170","name":"Anzygart","avatar":"https://static.tigerbbs.com/5255e6a87df642eff53b65456895ac13","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"People keep bidding it up regardless","listText":"People keep bidding it up regardless","text":"People keep bidding it up regardless","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990166317","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990161084,"gmtCreate":1660311407751,"gmtModify":1676533448699,"author":{"id":"3585363622677550","authorId":"3585363622677550","name":"TaiJin","avatar":"https://static.tigerbbs.com/24d2d840485600ee9789f516e956a70f","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"[Miser]&nbsp;","listText":"[Miser]&nbsp;","text":"[Miser]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990161084","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990169019,"gmtCreate":1660310965636,"gmtModify":1676533448647,"author":{"id":"3565238397133271","authorId":"3565238397133271","name":"Spaclover","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"T","listText":"T","text":"T","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990169019","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990160763,"gmtCreate":1660310903455,"gmtModify":1676533448645,"author":{"id":"3554971279962368","authorId":"3554971279962368","name":"shaunlohloh","avatar":"https://static.tigerbbs.com/d9417d251e570e152139797ec05b5914","vip":1,"crmLevel":5,"crmLevelSwitch":1},"htmlText":"Good article","listText":"Good article","text":"Good article","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990160763","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990160634,"gmtCreate":1660310747030,"gmtModify":1676533448637,"author":{"id":"4099263395755910","authorId":"4099263395755910","name":"AhBart","avatar":"https://static.itradeup.com/news/5c8a0140b30f2d6c3be37b2ad1a1efe8","vip":1,"crmLevel":5,"crmLevelSwitch":0},"htmlText":"Nice explanation by author. Perhaps author should suggest a change of its CEO since company management has credibility issues.....high time to sweep the floor and do some spring cleaning 🧹 🧹&nbsp;","listText":"Nice explanation by author. Perhaps author should suggest a change of its CEO since company management has credibility issues.....high time to sweep the floor and do some spring cleaning 🧹 🧹&nbsp;","text":"Nice explanation by author. Perhaps author should suggest a change of its CEO since company management has credibility issues.....high time to sweep the floor and do some spring cleaning 🧹 🧹","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990160634","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990160158,"gmtCreate":1660310679177,"gmtModify":1676533448630,"author":{"id":"3583970239946572","authorId":"3583970239946572","name":"SmithC","avatar":"https://community-static.tradeup.com/news/e5b8ba5438fe031d6c35788f29939838","vip":1,"hat":"https://static.tigerbbs.com/a3dee1aa3a3a3c1814833a4d3f8a5669","crmLevel":1,"crmLevelSwitch":0},"htmlText":"nice","listText":"nice","text":"nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990160158","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990182301,"gmtCreate":1660310044105,"gmtModify":1676533448516,"author":{"id":"3586301355400538","authorId":"3586301355400538","name":"Edwardtoh","avatar":"https://static.tigerbbs.com/b46042c9b9b5dcea7d55f33bccb139cc","vip":1,"crmLevel":2,"crmLevelSwitch":1},"htmlText":"Nice&nbsp;","listText":"Nice&nbsp;","text":"Nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990182301","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9990188702,"gmtCreate":1660309933508,"gmtModify":1676533448482,"author":{"id":"3571826634738651","authorId":"3571826634738651","name":"Leisuretrade","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"hat":"https://static.tigerbbs.com/f84d87792f02cf78e80ee34979fd31e5","crmLevel":5,"crmLevelSwitch":0},"htmlText":"ouch! the title says it all","listText":"ouch! the title says it all","text":"ouch! the title says it all","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9990188702","repostId":1190571853,"repostType":4,"repost":{"id":"1190571853","pubTimestamp":1660308827,"share":"https://www.laohu8.com/m/news/1190571853?lang=&edition=full","pubTime":"2022-08-12 20:53","market":"us","language":"en","title":"Palantir: Utter Disaster","url":"https://stock-news.laohu8.com/highlight/detail?id=1190571853","media":"Seeking Alpha","summary":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on t","content":"<html><head></head><body>Summary<ul><li>There is no faith in Palantir right now.</li><li>Headline results were mixed at best.</li><li>Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.</li><li>The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.</li></ul>So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail &#34;bag-holders&#34; out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader&#39;s market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it&#39;s been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also &#34;trash,&#34; as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock&#39;s momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir&#39;s Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company&#39;s customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management&#39;s prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not &#34;cheap&#34; by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company &#34;expects revenue of between $474 million to $475 million&#34; which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided &#34;revenue of $1.9 billion&#34; vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir&#39;s growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.</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: Utter 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: Utter Disaster\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-08-12 20:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4533226-palantir-utter-disaster>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly ...\n\n<a href=\"https://seekingalpha.com/article/4533226-palantir-utter-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/4533226-palantir-utter-disaster","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190571853","content_text":"SummaryThere is no faith in Palantir right now.Headline results were mixed at best.Expenses are on the rise, but cash flow is positive and the balance sheet is pristine.The pace of growth is clearly slowing, and that is a major issue for an earnings-light company.So, Palantir Technologies Inc. (NYSE:PLTR) stock has been one of the best trading stocks you can ask for. It moves with extreme swings higher and lower, our traders have made a bundle, especially by selling premium (i.e., puts and calls). We have stood behind the technology as a gamechanger. This is truly an innovative and disruptive company that has massive reach to both the commercial and government sectors.The company is operating in the most important currency of our lifetimes: big data. And while the company innovates, and helps its clients understand data and make decisions, as an investment this has been complete trash, really an utter disaster. That may not be a technical finance term in the literature, but it is a term you hear often at hedge funds and trading floors. Frankly, while we believe in the ability of the company to deliver long-term, and we own some of it, it has been an utter disaster for longs that are not trading in and out. While we are up off the bottom, there are still so many retail \"bag-holders\" out there.Trading not investingThe only ones making money in this stock are trading in and out. You can make good money holding a core investment and selling calls, or even selling puts, due to the volatility. Those who scalp nickels and dimes are doing well. Those who are caught near the bottom are hit hard. But investing here requires extreme patience, and frankly, while we get the win on the trades over and over, we recognize that investors are getting slammed here.Pressure mountsUnfortunately, despite a market rally, this remains a trader's market right now, and we think that is the best way to handle Palantir for now. That said, we think you can hold a small core position for the long-term, but with all of the issues facing the company from dilution to a questionable management team, the economic picture has been poor for the company, making matters worse. Governments are spending less. Businesses are tightening up. While we think you can see business recognize the money saving potential of decision making algorithms, company capex on things like this tends to get cut first when businesses tighten their belt. This is a near-term issue, while things like dilution are longer-term. The thing is, we think you should trade this name. We hate to see investors lose money, and we know it can be painful, but it's been complete trash, in our humble opinion. Is all hope lost here?Companies like Palantir tend to be expensive before they finally sustain earningsCompanies like Palantir are indeed often extremely expensive in the early stages. Granted, this company has been around for a long time, but is newly public, barely two years old here public. You really cannot value them on an earnings basis because there are no or very little earnings often as they ramp up. Palantir, as we mentioned has that 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. The last few weeks have seen a huge tech rally, and Palantir stock began to see a big bid up, until this week.Little faith in PalantirInvestors are now starting to see that Palantir may lose money or breakeven for years. 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, but even that pace of growth is slowing, and that is a huge risk. If you believe in the tech (we do) you can 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, but it may take years to get a return. It is just easier to make 5,6,7, even 10% on this name by trading over and over. Investing requires patience and belief that things will improve. Right now, this is a tall order for this company and management. There is no, or very little faith.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. However, the most recent quarter was also \"trash,\" as we say.Headline earnings figures mixedIn the just-reported quarter, performance was pretty mixed on the top and bottom lines with revenue just a touch ahead of consensus estimates, and earnings missing horribly. Total revenue grew 25.9% year-over-year to $473.0 million, beating estimates by just over $1 million. However, its profitability was lower than expected by $0.04, and worse, guidance was far less than consensus. That crushed the stock's momentum that it had going for it. Now revenues are only growing in the 20% range, versus 30+. Ouch. Further, most expected the company to make a tiny profit this quarter, and instead it lost money. Ouch.Palantir's Government and Commercial sectors both showing growthAs you likely are aware, Palantir has two reporting segments: both the government and commercial segments. The commercial revenue stream continues to grow rapidly, while government results seem to be slowing. There is a ton of disagreement out there on whether the somewhat shaky economy will help or hurt, but we think it definitely slows both sectors, especially government.Deceleration of revenue growth is definitely a negative for a company like this that does not enjoy high earnings. The revenues did rise 26% from last year, and the company's customer count increased to 304, up from 169 a year ago, but sequentially customer growth seems to be slowing. Palantir added 27 net new customers in the second quarter, with 19 net new commercial customers. 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 Q2, it rose 46% year-over-year. That said, each earnings report it seems the year-over-year growth is a little less. Not great.The government business growth has just stalled. Here government revenue expanded to $263 million in revenue in Q2, rising 9% quarter-over-quarter. One positive is that health care (both in government and also commercial) has become a substantial and rapidly growing business, generating approximately $153 million in revenue in the first half of 2022, up from $42 million in the first half of 2020. Decent growth.Margins show good newsFor as much as the company seemed to have whiffed, there has been pockets of good news. Palantir is seeing very positive momentum in its margins. 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 here. Adjusted gross margin, (these are the margins which excludes the horrible dilutive stock-based compensation expenses) was 81%. The adjusted income from operations, excluding stock-based compensation and related employer payroll taxes, was $108 million, representing adjusted operating margin of 23% ahead of management's prior guidance of 20%.Palantir expenses are on the rise but cash flow is positive.While margins were solid, adjusted expenses are on the rise. Expenses were $365 million, up 11% sequentially. With the revenue number and higher expenses however, despite margins, led to a loss in the quarter. As mentioned adjusted earnings per share was a loss of $0.01. Some of this was that there was a $0.05 impact driven primarily by losses on securities held.The company also generated $62 million in cash from operations, and the adjusted free cash flow was $61 million. That was the seventh consecutive quarter of positive free cash flow. Over the last year Palantir generated $314 million in adjusted free cash flow. The balance sheet is anything but trash. The company still has a solid $2.4 billion in cash and cash equivalents and absolutely no debt. Now that said, the company did decide a few weeks ago to expand its revolving credit facility by adding a $450 million new incremental delayed draw term loan facility. Long story short, the company has liquidity if needed. Overall, they have an additional liquidity source up to $950 million and it remains entirely undrawn.The reason we explain that is this company is in no danger of any sort of bankruptcies. The investment might be horrible as sustained positive EPS remains elusive, but the balance sheet is nice.Palantir stock valuationWhen we look at the valuation of Palantir stock, the bottom line is the stock is expensive to own. Sure, looking at traditional price-to-earnings is futile, but if you did you would see a stock at like 170X FWD EPS. 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 here in 2022. Keep that in mind. At 10.4X sales, the stock is relatively cheaper than it has ever been, but it is still not \"cheap\" by any stretch at all. We like the cash flow metrics, though the price to cash flow is still about 70X.Guidance was more than disappointingThe biggest concern right now is not valuation, or the Q2 earnings results. Nor is it the fact that the stock has been a trash investment. The biggest issue right now is also not the never ending dilution (which stinks). It is not the broader market risk either. The largest issue is a slowdown in performance, the slowing growth of revenues, and continued reduced guidance including here in Q3. The Q3 guidance was pretty weak. For Q3 2022, the company \"expects revenue of between $474 million to $475 million\" which was way below consensus of $505 million. For the year, we are looking at nearly 5% lower revenues than expected. Ouch. For the year management guided \"revenue of $1.9 billion\" vs. consensus of $1.98 billion. Adjusted income from operations should be $341 million to $343 million.So, what is our take?We would be selling calls here on the next pop. The volatility is high here and premiums are hefty. On the next big downturn, sell puts a month or two out and out of the money. If assigned, turn right around and sell calls. Trade around the position. Palantir's growth is slowly fading, though still strong. We also think profitability is elusive. Dilution could continue so long that positive EPS becomes out of reach without future buybacks. Stick to trading the name, or buy a few shares and come back in 10 years.Take homeWe love that the company operates with no debt and has nice positive free cash flow. The company offers amazing solutions for government and businesses by using big data and using analytics to improve operations. But, investments in the stock have been trashed. Traders have won over and over again. While growth will continue, and the balance sheet is solid, we have to keep an eye on the pace of customer growth and contract values. On the next drawdown to the $8 range, we would be buyers.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":110,"commentSize":0,"repostSize":0,"favoriteSize":3,"likeStatus":false,"favoriteStatus":false}}