Palantir Stock: Get Out ASAP (Rating Downgrade)

56
Comment
2

Palantir Stock: Get Out ASAP (Rating Downgrade)

Seeking Alpha2023-06-08

SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...

Source Link

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

Report

Comment

B.N.F
·2023-06-08
Typical fear tactic. Sell yourself shares for their gain at cheap
Reply
1
Report
Longs
·2023-06-08
👌🏼🙏🏼
Reply
1
Report
YnWa
·2023-06-08
don't follow noise. Nobody knows the future, trust your own judgement based on fundamental. Mega-cap stocks all start off in the same manner.
Reply
1
Report
Mr Mooney
·2023-06-08
Not only pltr but also All othwr technology stocks
Reply
Like
Report
BL9626
·2023-06-08
He trying hard to buy low.... he miss the boat
Reply
Like
Report
Lord Bagdonoff
·2023-06-08
This stock will be $50 in the future
Reply
1
Report
Ong CS
·2023-06-08
$17 is a strong resistance, anyway a good correction after a strong run up. Price movements will not go on straight line. Fundamentally It's a good company, with a positive results on the 2Q closing by end of this month.
Reply
Like
Report
Swordmerlin
·2023-06-08
Don't might to take risk to buy this Palantir stock. Still believe thier AI will work. Buy when it's low.
Reply
Like
Report
SathyaNar
·2023-06-08
Really these articles will leave perplexed if we don't do the ground work of the company and merely trying to have ride on bull run. I have been holding this stock since 8 and top up another 100 at 16.92 last night. I have negotiated all the profits for the purchase yesterday,hoping for long term profits. Now after reading this article not sure what to do. I see good hedge funds like vanguard, Blackrock have invested, But what price is the big question.
Reply
125
Report
Fold Replies
- mavis88:
  k
  2023-06-08
  Reply
  Report
- MadAndy:
  they're making a profit and not a loss, but the question is where from. last quarter it seemed to be from exceptional items. And this quarter they'd have made a loss but for the high interest rates giving them a good yield on that stack of cash they're sitting on.
  
  There may be more to their story but I'm still not convinced.
  2023-06-08
  Reply
  Report
- jennyvu:
  K
  2023-06-08
  Reply
  Report
View more 2 comments
chinchillx
·2023-06-08
I agree hence i sold all last nite at 16.80 lol.. this has been my largest portfolio
Reply
2
Report
Seanpoh
·2023-06-08
Fck off
Reply
Like
Report
Nase
·2023-06-08
Again waiting at 5$ 👊🙀
Reply
3
Report
FGP
·2023-06-08
Article bad for those who start at 14-17 and good for those waiting... casino style, black/red small/big odd/even
Reply
2
Report
romanc9
·2023-06-08
Like those keep saying Tesla worth $100, see what happened now. Well maybe it will go $100 when there is another split.. Do your own DD. Invest with extra money, so you can afford to hold. Don't borrow money to invest. There are many other counters out there.
Reply
3
Report
mster
·2023-06-08
Some of these ratings are to manipulate the market, they missed the boat, now trying to bring the stock down lower so they can catch it. Take these articles as entertainment or totally don't read them.
Reply
17
Report
judyspt
·2023-06-08
This guy trying to pull down the price and buy[Miser]
Reply
6
Report
Guavaxf30
·2023-06-08
Women and children first. All others, will just sadly drown........
Reply
1
Report
Daytraderz
·2023-06-08
Trade whats infront of u
Reply
4
Report

Most Discussed

7x24

All

Terms and Conditions·Privacy Policy

Company: TTMF Limited. Tech supported by Xiangshang Yixin.

Email：uservice@ttm.financial

{"i18n":{"language":"en_US"},"data":{"share":"https://ttm.financial/m/news/2341800265?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2023-06-08 09:54","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2341800265","market":"us","top_or_hot":-1,"title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","media":"Seeking Alpha","content":"<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Palantir Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"PLTR","symbol_name":"Palantir Technologies Inc.","start_time":0,"source_url":"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade","article_id":"2341800265","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","pubTimestamp":1686189271,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"PLTR":"Palantir Technologies Inc."},"translate_title":"Palantir股票：尽快退出（评级下调）","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PLTR":1},"content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","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":185111306960912,"gmtCreate":1686232730111,"gmtModify":1686232734855,"author":{"id":"3586270075116434","authorId":"3586270075116434","name":"B.N.F","avatar":"https://community-static.tradeup.com/news/42b92221928b379150d4f88e77bc1609","vip":1,"crmLevel":6,"crmLevelSwitch":1},"htmlText":"Typical fear tactic. Sell yourself shares for their&nbsp;gain at cheap","listText":"Typical fear tactic. Sell yourself shares for their&nbsp;gain at cheap","text":"Typical fear tactic. Sell yourself shares for their gain at cheap","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/185111306960912","repostId":2341800265,"repostType":2,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":185044957589520,"gmtCreate":1686216531534,"gmtModify":1686216536218,"author":{"id":"4115290449563752","authorId":"4115290449563752","name":"Longs","avatar":"https://community-static.tradeup.com/news/824b5073731ab909a8d4e129caa8d995","vip":1,"crmLevel":6,"crmLevelSwitch":0},"htmlText":"👌🏼🙏🏼","listText":"👌🏼🙏🏼","text":"👌🏼🙏🏼","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/185044957589520","repostId":2341800265,"repostType":2,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":185034420908184,"gmtCreate":1686213852866,"gmtModify":1686213856724,"author":{"id":"3571405784206357","authorId":"3571405784206357","name":"YnWa","avatar":"https://static.tigerbbs.com/8dedf27751203ac80603a416bd954788","vip":1,"hat":"https://static.tigerbbs.com/646756f1284a5a6480ed02cc4fa7d1d2","crmLevel":6,"crmLevelSwitch":0},"htmlText":"don't follow noise. Nobody knows the future, trust your own judgement based on fundamental. Mega-cap stocks all start off in the same manner.","listText":"don't follow noise. Nobody knows the future, trust your own judgement based on fundamental. Mega-cap stocks all start off in the same manner.","text":"don't follow noise. Nobody knows the future, trust your own judgement based on fundamental. Mega-cap stocks all start off in the same manner.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/185034420908184","repostId":2341800265,"repostType":2,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184989771558920,"gmtCreate":1686202792255,"gmtModify":1686202796347,"author":{"id":"3583044537429562","authorId":"3583044537429562","name":"Mr Mooney","avatar":"https://community-static.tradeup.com/news/6836340f20d36afa666f6d8d4b0a929d","vip":1,"crmLevel":4,"crmLevelSwitch":0},"htmlText":"Not only pltr but also&nbsp;All othwr&nbsp;technology stocks&nbsp;","listText":"Not only pltr but also&nbsp;All othwr&nbsp;technology stocks&nbsp;","text":"Not only pltr but also All othwr technology stocks","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184989771558920","repostId":2341800265,"repostType":4,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184987018952856,"gmtCreate":1686202280123,"gmtModify":1686202284457,"author":{"id":"3569469979348682","authorId":"3569469979348682","name":"BL9626","avatar":"https://community-static.tradeup.com/news/9430968a3ee7ad2e1a4f28ec28cbfe14","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":9,"crmLevelSwitch":1},"htmlText":"He trying hard to buy low.... he miss the boat&nbsp;","listText":"He trying hard to buy low.... he miss the boat&nbsp;","text":"He trying hard to buy low.... he miss the boat","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184987018952856","repostId":2341800265,"repostType":4,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184985766572208,"gmtCreate":1686202024676,"gmtModify":1686202028268,"author":{"id":"3570004939267641","authorId":"3570004939267641","name":"Lord Bagdonoff","avatar":"https://static.itradeup.com/news/6765c2bb071c1df5b7fd4e34c533c22e","vip":1,"hat":"https://static.tigerbbs.com/f84d87792f02cf78e80ee34979fd31e5","crmLevel":6,"crmLevelSwitch":1},"htmlText":"This stock will be $50 in the future","listText":"This stock will be $50 in the future","text":"This stock will be $50 in the future","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184985766572208","repostId":2341800265,"repostType":4,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184982500036712,"gmtCreate":1686201022979,"gmtModify":1686201026445,"author":{"id":"4111725412337832","authorId":"4111725412337832","name":"Ong CS","avatar":"https://community-static.tradeup.com/news/d9fd4841df551730d352f87c3b3d9c15","vip":1,"crmLevel":5,"crmLevelSwitch":0},"htmlText":"$17 is a strong resistance, anyway a good correction after a strong run up. Price movements will not go on straight line. Fundamentally It's a good company, with a positive results on the 2Q closing by end of this month.&nbsp;","listText":"$17 is a strong resistance, anyway a good correction after a strong run up. Price movements will not go on straight line. Fundamentally It's a good company, with a positive results on the 2Q closing by end of this month.&nbsp;","text":"$17 is a strong resistance, anyway a good correction after a strong run up. Price movements will not go on straight line. Fundamentally It's a good company, with a positive results on the 2Q closing by end of this month.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184982500036712","repostId":2341800265,"repostType":4,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184978637778952,"gmtCreate":1686200074046,"gmtModify":1686200078335,"author":{"id":"3582338758553096","authorId":"3582338758553096","name":"Swordmerlin","avatar":"https://community-static.tradeup.com/news/1f836008e90c916e86b10677e7b767fd","vip":1,"crmLevel":3,"crmLevelSwitch":0},"htmlText":"Don't might to take risk to buy this Palantir stock. Still believe thier&nbsp;AI will work. Buy when it's low.&nbsp;","listText":"Don't might to take risk to buy this Palantir stock. Still believe thier&nbsp;AI will work. Buy when it's low.&nbsp;","text":"Don't might to take risk to buy this Palantir stock. Still believe thier AI will work. Buy when it's low.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184978637778952","repostId":2341800265,"repostType":4,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184967420686456,"gmtCreate":1686197469966,"gmtModify":1686197474296,"author":{"id":"4094039149040320","authorId":"4094039149040320","name":"SathyaNar","avatar":"https://static.tigerbbs.com/7b4191bcd9259a2ab75c1c00e916039b","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":5,"crmLevelSwitch":1},"htmlText":"Really these articles will leave perplexed if we don't do the ground work of the company and merely trying to have ride on bull run. I have been holding this stock since 8 and top up another 100 at&nbsp;16.92 last night. I have negotiated all the profits for the purchase yesterday,hoping for long term profits.&nbsp; Now after reading this article not sure what to do. I see good hedge funds like vanguard, Blackrock have invested,&nbsp;But what price is the big question.&nbsp; &nbsp;","listText":"Really these articles will leave perplexed if we don't do the ground work of the company and merely trying to have ride on bull run. I have been holding this stock since 8 and top up another 100 at&nbsp;16.92 last night. I have negotiated all the profits for the purchase yesterday,hoping for long term profits.&nbsp; Now after reading this article not sure what to do. I see good hedge funds like vanguard, Blackrock have invested,&nbsp;But what price is the big question.&nbsp; &nbsp;","text":"Really these articles will leave perplexed if we don't do the ground work of the company and merely trying to have ride on bull run. I have been holding this stock since 8 and top up another 100 at 16.92 last night. I have negotiated all the profits for the purchase yesterday,hoping for long term profits. Now after reading this article not sure what to do. I see good hedge funds like vanguard, Blackrock have invested, But what price is the big question.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":125,"commentSize":5,"repostSize":1,"link":"https://ttm.financial/post/184967420686456","repostId":2341800265,"repostType":2,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":106397520,"gmtCreate":1686216486153,"gmtModify":1686216495673,"authorId":4127625745778862,"author":{"id":4127625745778862,"authorId":4127625745778862,"name":"mavis88","avatar":"https://community-static.tradeup.com/news/02b482b2c40d0e87999261caefcc5e95","vip":1,"currentWearingBadge":{"badgeId":"7a9f168ff73447fe856ed6c938b61789-1","templateUuid":"7a9f168ff73447fe856ed6c938b61789","name":"Knowledgeable Investor","description":"Traded more than 10 stocks","bigImgUrl":"https://static.tigerbbs.com/e74cc24115c4fbae6154ec1b1041bf47","smallImgUrl":"https://static.tigerbbs.com/d48265cbfd97c57f9048db29f22227b0","grayImgUrl":"https://static.tigerbbs.com/76c6d6898b073c77e1c537ebe9ac1c57","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2023.07.14","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1102},"crmLevel":2,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":184967420686456,"type":1,"supId":0,"prevId":0,"content":"<u>k</u>","text":"<u>k</u>","html":"<u>k</u>"},{"id":106397497,"gmtCreate":1686215665215,"gmtModify":1686215668642,"authorId":4130105231574432,"author":{"id":4130105231574432,"authorId":4130105231574432,"name":"MadAndy","avatar":"https://community-static.tradeup.com/news/92e44ac868ad45f9ae9702eb2a898996","vip":1,"currentWearingBadge":{"badgeId":"7a9f168ff73447fe856ed6c938b61789-1","templateUuid":"7a9f168ff73447fe856ed6c938b61789","name":"Knowledgeable Investor","description":"Traded more than 10 stocks","bigImgUrl":"https://static.tigerbbs.com/e74cc24115c4fbae6154ec1b1041bf47","smallImgUrl":"https://static.tigerbbs.com/d48265cbfd97c57f9048db29f22227b0","grayImgUrl":"https://static.tigerbbs.com/76c6d6898b073c77e1c537ebe9ac1c57","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2023.08.17","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1102},"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":184967420686456,"type":1,"supId":0,"prevId":0,"content":"they're making a profit and not a loss, but the question is where from. last quarter it seemed to be from exceptional items. And this quarter they'd have made a loss but for the high interest rates giving them a good yield on that stack of cash they're sitting on.<p></p>\n<p dir=\"ltr\">There may be more to their story but I'm still not convinced.</p>","text":"they're making a profit and not a loss, but the question is where from. last quarter it seemed to be from exceptional items. And this quarter they'd have made a loss but for the high interest rates giving them a good yield on that stack of cash they're sitting on.<p></p>\n<p dir=\"ltr\">There may be more to their story but I'm still not convinced.</p>","html":"they're making a profit and not a loss, but the question is where from. last quarter it seemed to be from exceptional items. And this quarter they'd have made a loss but for the high interest rates giving them a good yield on that stack of cash they're sitting on.<p></p>\n<p dir=\"ltr\">There may be more to their story but I'm still not convinced.</p>"},{"id":106397148,"gmtCreate":1686204786827,"gmtModify":1686204793046,"authorId":4094724215262760,"author":{"id":4094724215262760,"authorId":4094724215262760,"name":"jennyvu","avatar":"https://static.tigerbbs.com/7b313f2b73c02f4cd762f0297fdfe576","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":184967420686456,"type":1,"supId":0,"prevId":0,"content":"<u>K</u>","text":"<u>K</u>","html":"<u>K</u>"},{"id":106397113,"gmtCreate":1686203368788,"gmtModify":1686203374959,"authorId":3586927429503803,"author":{"id":3586927429503803,"authorId":3586927429503803,"name":"Joeljp","avatar":"https://community-static.tradeup.com/news/18d0388810d935ce3f000f064bb868d6","vip":1,"currentWearingBadge":{"badgeId":"972123088c9646f7b6091ae0662215be-3","templateUuid":"972123088c9646f7b6091ae0662215be","name":"Legendary Trader","description":"Total number of securities or futures transactions reached 300","bigImgUrl":"https://static.tigerbbs.com/656db16598a0b8f21429e10d6c1cb033","smallImgUrl":"https://static.tigerbbs.com/03f10910d4dd9234f9b5702a3342193a","grayImgUrl":"https://static.tigerbbs.com/0c767e35268feb729d50d3fa9a386c5a","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2024.02.21","exceedPercentage":"93.05%","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1100},"crmLevel":5,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":184967420686456,"type":1,"supId":0,"prevId":0,"content":"ok","text":"ok","html":"ok"},{"id":106396966,"gmtCreate":1686198551474,"gmtModify":1686198557732,"authorId":4111024885793192,"author":{"id":4111024885793192,"authorId":4111024885793192,"name":"enforcer","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"currentWearingBadge":{"badgeId":"972123088c9646f7b6091ae0662215be-2","templateUuid":"972123088c9646f7b6091ae0662215be","name":"Master Trader","description":"Total number of securities or futures transactions reached 100","bigImgUrl":"https://static.tigerbbs.com/ad22cfbe2d05aa393b18e9226e4b0307","smallImgUrl":"https://static.tigerbbs.com/36702e6ff3ffe46acafee66cc85273ca","grayImgUrl":"https://static.tigerbbs.com/d52eb88fa385cf5abe2616ed63781765","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2022.10.29","exceedPercentage":"80.56%","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1100},"crmLevel":7,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":184967420686456,"type":1,"supId":0,"prevId":0,"content":"ok","text":"ok","html":"ok"}],"langContent":"EN"},{"id":184963045703824,"gmtCreate":1686196413146,"gmtModify":1686196416316,"author":{"id":"3575764142275716","authorId":"3575764142275716","name":"chinchillx","avatar":"https://static.tigerbbs.com/8fe1632cb6b0562a7b74cfbbbad35b14","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"I agree hence i sold all last nite at 16.80 lol.. this has been my largest portfolio","listText":"I agree hence i sold all last nite at 16.80 lol.. this has been my largest portfolio","text":"I agree hence i sold all last nite at 16.80 lol.. this has been my largest portfolio","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184963045703824","repostId":2341800265,"repostType":2,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184963211816968,"gmtCreate":1686196307942,"gmtModify":1686197326006,"author":{"id":"3563202655976566","authorId":"3563202655976566","name":"Seanpoh","avatar":"https://static.tigerbbs.com/484430357644c825d95da1ec6f71d97e","vip":1,"crmLevel":2,"crmLevelSwitch":0},"htmlText":"Fck off","listText":"Fck off","text":"Fck off","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184963211816968","repostId":2341800265,"repostType":2,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184960848863376,"gmtCreate":1686195876808,"gmtModify":1686195880538,"author":{"id":"4099451016804780","authorId":"4099451016804780","name":"Nase","avatar":"https://community-static.tradeup.com/news/75fd46c54802015fad711baba153fe17","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":5,"crmLevelSwitch":0},"htmlText":"Again waiting at 5$ 👊🙀","listText":"Again waiting at 5$ 👊🙀","text":"Again waiting at 5$ 👊🙀","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184960848863376","repostId":2341800265,"repostType":4,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184960649126016,"gmtCreate":1686195691003,"gmtModify":1686195694991,"author":{"id":"3584079457608282","authorId":"3584079457608282","name":"FGP","avatar":"https://community-static.tradeup.com/news/4f96275867e9fcc09f90747c0edcd143","vip":1,"hat":"https://static.tigerbbs.com/a3dee1aa3a3a3c1814833a4d3f8a5669","crmLevel":9,"crmLevelSwitch":1},"htmlText":"Article bad for those who start at 14-17 and good for those waiting... casino style, black/red small/big odd/even","listText":"Article bad for those who start at 14-17 and good for those waiting... casino style, black/red small/big odd/even","text":"Article bad for those who start at 14-17 and good for those waiting... casino style, black/red small/big odd/even","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184960649126016","repostId":2341800265,"repostType":4,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184959895826464,"gmtCreate":1686195499941,"gmtModify":1686195504376,"author":{"id":"4102495020619380","authorId":"4102495020619380","name":"romanc9","avatar":"https://static.tigerbbs.com/76bfe37245defa055adfff7453f1520f","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":2,"crmLevelSwitch":1},"htmlText":"Like those keep saying Tesla worth $100, see what happened now. Well maybe it will go $100 when there is another split.. Do your own DD. Invest with extra money, so you can afford to hold. Don't borrow money to invest. There are many other counters out there.&nbsp;","listText":"Like those keep saying Tesla worth $100, see what happened now. Well maybe it will go $100 when there is another split.. Do your own DD. Invest with extra money, so you can afford to hold. Don't borrow money to invest. There are many other counters out there.&nbsp;","text":"Like those keep saying Tesla worth $100, see what happened now. Well maybe it will go $100 when there is another split.. Do your own DD. Invest with extra money, so you can afford to hold. Don't borrow money to invest. There are many other counters out there.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184959895826464","repostId":2341800265,"repostType":2,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184959106691168,"gmtCreate":1686195308033,"gmtModify":1686195311721,"author":{"id":"4102815868703010","authorId":"4102815868703010","name":"mster","avatar":"https://community-static.tradeup.com/news/81a8fe18bd419696551df5320d8db477","vip":1,"crmLevel":6,"crmLevelSwitch":0},"htmlText":"Some of these ratings are to manipulate the market, they missed the boat, now trying to bring the stock down lower so they can catch it. Take these articles as entertainment or totally don't read them.&nbsp;","listText":"Some of these ratings are to manipulate the market, they missed the boat, now trying to bring the stock down lower so they can catch it. Take these articles as entertainment or totally don't read them.&nbsp;","text":"Some of these ratings are to manipulate the market, they missed the boat, now trying to bring the stock down lower so they can catch it. Take these articles as entertainment or totally don't read them.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":17,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184959106691168","repostId":2341800265,"repostType":2,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184959075348584,"gmtCreate":1686195304061,"gmtModify":1686195309383,"author":{"id":"4088945193415610","authorId":"4088945193415610","name":"judyspt","avatar":"https://static.tigerbbs.com/28075c7d730eb01e7fab4597684478f4","vip":1,"crmLevel":6,"crmLevelSwitch":1},"htmlText":"This guy trying to pull down the price and buy[Miser]&nbsp;","listText":"This guy trying to pull down the price and buy[Miser]&nbsp;","text":"This guy trying to pull down the price and buy[Miser]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184959075348584","repostId":2341800265,"repostType":2,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184957992128528,"gmtCreate":1686195299732,"gmtModify":1686195304435,"author":{"id":"3576140222331577","authorId":"3576140222331577","name":"Guavaxf30","avatar":"https://static.tigerbbs.com/1ff15ff6aa254c9130f9af922f7e2447","vip":1,"crmLevel":9,"crmLevelSwitch":1},"htmlText":"Women and children first. All others, will just sadly drown........","listText":"Women and children first. All others, will just sadly drown........","text":"Women and children first. All others, will just sadly drown........","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184957992128528","repostId":2341800265,"repostType":2,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":184957720100984,"gmtCreate":1686195101659,"gmtModify":1686195105415,"author":{"id":"3566892305869986","authorId":"3566892305869986","name":"Daytraderz","avatar":"https://static.tigerbbs.com/32dd995192e9265a76b74140e0e3bbc2","vip":1,"hat":"https://static.tigerbbs.com/0a8758340a08196056f8bc1e54805193","crmLevel":6,"crmLevelSwitch":1},"htmlText":"Trade whats infront of u","listText":"Trade whats infront of u","text":"Trade whats infront of u","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/184957720100984","repostId":2341800265,"repostType":2,"repost":{"id":"2341800265","pubTimestamp":1686189271,"share":"https://www.laohu8.com/m/news/2341800265?lang=&edition=full","pubTime":"2023-06-08 09:54","market":"us","language":"en","title":"Palantir Stock: Get Out ASAP (Rating Downgrade)","url":"https://stock-news.laohu8.com/highlight/detail?id=2341800265","media":"Seeking Alpha","summary":"Palantir Stock: Get Out ASAP (Rating Downgrade) (NYSE:PLTR)","content":"<html><head></head><body><h2 style=\"text-align: left;\">Summary</h2><ul><li><p>After the Palantir stock recently broke through the $15 mark, I decided to update my thesis.</p></li><li><p>As I see it, the company has some significant problems related to the structure of its business model.</p></li><li><p>Alex Karp says in an interview that PLTR probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p></li><li><p>Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.</p></li><li><p>I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></li></ul><p>After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, <em>I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it&#39;ll take many years for PLTR to grow out of its current valuation.</em> I&#39;m downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.</p><h2>Why Do I Think So?</h2><p>Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.</p><p>Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I&#39;ve written before, the company has some problems related to the structure of its business model. And it&#39;s not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.</p><p>First off, Palantir&#39;s software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f198b23e4449894d36c74caf8370ce07\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"417\"/><span>Data by YCharts</span></p><p>While Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.</p><p>And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn&#39;t sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d48c0b0f22419115fa897cfd6fdbddfd\" alt=\"Bloomberg [author&#39;s notes]\" title=\"Bloomberg [author&#39;s notes]\" tg-width=\"640\" tg-height=\"184\"/><span>Bloomberg [author&#39;s notes]</span></p><p>Correct me if I&#39;m wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR&#39;s CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.</p><p>Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like <a href=\"https://laohu8.com/S/SNOW\">Snowflake</a>, Databricks, SAS, R, AWS, and Azure. Palantir&#39;s closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.</p><p>So I believe the company&#39;s business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.</p><p>But let&#39;s pretend for a moment that I&#39;m wrong and AIP is indeed a game-changer. Let&#39;s just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/63b710b14aa42ca0e813128cf1121d32\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"640\" tg-height=\"723\"/><span>Credit Suisse [proprietary source]</span></p><p>This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS&#39;s numbers are also 19-18% above consensus. In other words, the bank&#39;s analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.</p><p>Pay attention to the forecast data above - it&#39;s very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by &gt;75% over the same period. That&#39;s slightly faster than what the company has been posting since 2022.</p><p>PLRT&#39;s net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.</p><p><em>In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?</em></p><p>Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won&#39;t go beyond the $15.00/sh mark.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/07036fb1cf9e0312f902c94b8fa8d172\" alt=\"Credit Suisse [proprietary source]\" title=\"Credit Suisse [proprietary source]\" tg-width=\"544\" tg-height=\"426\"/><span>Credit Suisse [proprietary source]</span></p><p>With PLTR&#39;s P/E ratio back at &gt;70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don&#39;t know about you, but I can&#39;t understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f2a7d46e1305309af2b87a1a7e0bc8f\" alt=\"Seeking Alpha, PLTR, author&#39;s notes\" title=\"Seeking Alpha, PLTR, author&#39;s notes\" tg-width=\"640\" tg-height=\"468\"/><span>Seeking Alpha, PLTR, author&#39;s notes</span></p><p>Even with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.</p><h2>The Bottom Line</h2><p>I realize that I could easily be wrong in my assessments of the company&#39;s business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it&#39;s too early to judge AIP&#39;s success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.</p><p>However, I try to think through the prism of the most likely events. I think it&#39;s more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company&#39;s operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.</p><p>For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.</p></body></html>","source":"seekingalpha","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 Stock: Get Out ASAP (Rating Downgrade)</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 Stock: Get Out ASAP (Rating Downgrade)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-06-08 09:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model...</p>\n\n<a href=\"https://seekingalpha.com/article/4610044-palantir-stock-get-out-asap-rating-downgrade\">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/4610044-palantir-stock-get-out-asap-rating-downgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2341800265","content_text":"SummaryAfter the Palantir stock recently broke through the $15 mark, I decided to update my thesis.As I see it, the company has some significant problems related to the structure of its business model.Alex Karp says in an interview that PLTR probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Even if PLTR trades at extremely high EV/UFCF multiples as suggested by bulls, the fair value is unlikely to exceed what we see today.I assign a Sell rating on PLTR stock, downgrading it from Hold.After the stock recently broke through the $15 mark, I decided to update my thesis. Unfortunately for bulls, I must warn those who wanted to jump on this positive bandwagon: the company is perfectly valued at this point and it'll take many years for PLTR to grow out of its current valuation. I'm downgrading the stock again from Hold to Sell and urge everyone to be extremely cautious.Why Do I Think So?Palantir develops and sells software platforms to operationalize data for large government and commercial customers. The company has 3 platforms: Gotham, which is used in the government sector; Foundry, a more standardized offering primarily for commercial customers; and Apollo, a critical systems operations coordinator launched for commercial use in 2021. The firm is developing its latest offering, the Artificial Intelligence Platform [AIP], which combines the existing software platforms with large language models [LLMs] to enable customers in commercial and government sectors to leverage the benefits of artificial intelligence breakthroughs [according to the latest 10-Q filing]. AIP allows users to connect LLMs with their data and operations, aiding decision-making while adhering to legal, ethical, and security requirements.Unsurprisingly, the mention of AI and LLMs in the same paragraph of the 10-Q, as well as the strong Q1 FY2023 numbers, gave the stock a significant boost and allowed speculators to double their investment [so far] on buying PLTR shares ahead of the quarterly report release. However, as I've written before, the company has some problems related to the structure of its business model. And it's not yet clear exactly how these problems will be resolved in the foreseeable future - no matter how many new features are pitched through the marketing campaigns.First off, Palantir's software still requires extensive human interaction for coding, and it was expensive and lacked comprehensive features for everyday business users when the company first started as a business intelligence [BI - not AI] company. So due to the proprietary nature of its platform and the need for customization and coding, Palantir became more of a services company rather than a scalable software company. The heavy reliance on employees for implementation hindered growth and scalability - this is why PLTR lost its previous operating growth at some point in its recent past.Data by YChartsWhile Palantir found success with government contracts and security-related use cases, their software was not the primary driver of their success. The company relied heavily on the expertise of its employees, making it difficult to scale the business, while at the same time, its focus on the federal sector limited its presence in the commercial space.And since I touched upon that, in the commercial space, competitors are not sleeping. They keep on evolving their platforms, expanding mobile capabilities, and building partner ecosystems to cater to various use cases. Companies were shifting towards more affordable and flexible analytics solutions, making it challenging for Palantir to compete effectively. And at the same time, CEO Alex Karp says in an interview with Bloomberg that the company probably shouldn't sell its AI offerings to some commercial customers, which I think limits and deters a potential buyer.Bloomberg [author's notes]Correct me if I'm wrong, but commercial space should be the main growth driver for the company if it wants to scale and hold the high valuation multiples that the market assigns to it. And at the very time when an unprecedented war for a customer is breaking out in the AI space, PLTR's CEO is making such claims, ignoring other competitors or not taking them seriously - that poses future problems, in my opinion.Over the past few years, the industry witnessed a shift where the GUI/front end became commoditized, and the focus shifted to the data stack and building models, machine learning, etc. Companies started adopting cost-effective analytics tools like Power BI, and the work was done using platforms like Snowflake, Databricks, SAS, R, AWS, and Azure. Palantir's closed-end system and expensive resources were not aligned with this trend - the hyped AIP may not really solve the problem here.So I believe the company's business model, heavily dependent on expensive resources and a consulting approach, does not align with the strategies of successful software companies today.But let's pretend for a moment that I'm wrong and AIP is indeed a game-changer. Let's just make some napkin calculations. I have forward-looking data on hand from a former Credit Suisse analyst who calculated the key operating data for PLTR through FY2025:Credit Suisse [proprietary source]This analyst had a price target of $11 per share and an adjusted EPS forecast for FY2023 of $0.25 - which is above the current consensus. FY2024 and FY2025 CS's numbers are also 19-18% above consensus. In other words, the bank's analyst was clearly bullish - the current neutral rating is the result of the sharp revaluation of the stock price as I see it.Pay attention to the forecast data above - it's very positive. EBITDA is expected to more than double by FY2025, while revenue is expected to grow by >75% over the same period. That's slightly faster than what the company has been posting since 2022.PLRT's net debt is expected to remain strongly negative, as there is no long-term debt, and cash flow is very positive. Shareholders equity should double against this backdrop and the number of shares outstanding is expected to decline by 11.75% over this 5-year period.In a word - everything looks more than positive and rosy for the company. Why then only $11 per share as a price target?Because even if PLTR trades at NTM and SNTM EV/UFCF multiples of 99.7x and 76.1x [respectively], as the analyst writes, which would correspond to the Blue Sky scenario, the fair value won't go beyond the $15.00/sh mark.Credit Suisse [proprietary source]With PLTR's P/E ratio back at >70x, it makes absolutely no sense for me to keep the stock on the Hold rating. I don't know about you, but I can't understand the intentions of many investors to overpay for a technology that has questionable unit economics and rooting business model issues.Seeking Alpha, PLTR, author's notesEven with relatively optimistic forecasts and a continuation of the break-even trend, PLTR stock is again severely overvalued like in late-2021, and risks losing most [if not all] of its gains once the AI hype subsides.The Bottom LineI realize that I could easily be wrong in my assessments of the company's business model - this poses a significant upside risk to my updated Sell thesis. The thing is, it's too early to judge AIP's success or failure - too little time has passed, and its commercial success is shrouded in a veil of secrecy. I could also be wrong about the valuation of the company - with a relatively fast breaking-even dynamic, PLTR may grow out of its valuation sooner than I see, contrary to my Sell thesis.However, I try to think through the prism of the most likely events. I think it's more likely that PLTR will become a run-of-the-mill AI vendor at best, and its richly valued market cap will decline as the company's operations mature. The current hype is nothing more than a pop against the backdrop of another bubble that is inflating and cannot last forever. I expect the market to reprice all the risks in the coming months, and PLTR will then probably be among those negatively affected because of that repricing.For these reasons, I assign a Sell rating on PLTR stock, downgrading it from Hold.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":56,"commentSize":0,"repostSize":14,"favoriteSize":2,"likeStatus":false,"favoriteStatus":false}}