If All analysts are bullish, a

1
Comment
Favorite

If All analysts are bullish, all investors would have rushed in.Its price would have run its course!! Too much hype already by then!

Why I'm Downgrading Palantir Despite Strong U.S. Commercial And Government Growth

SummaryPalantir's bootcamp sales methods have proven effective, driving strong U.S. commercial growth, but recent government sales surged unexpectedly, boosting overall revenue.U.S. commercial revenue

Why I'm Downgrading Palantir Despite Strong U.S. Commercial And Government Growth

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

Top
Latest

No comments yet

Most Discussed

Terms and Conditions·Privacy Policy

Company: TTMF Limited. Tech supported by Xiangshang Yixin.

Email：uservice@ttm.financial

{"i18n":{"language":"en_US"},"data":{"magic":2,"id":352887623237704,"tweetId":"352887623237704","gmtCreate":1727163309959,"gmtModify":1727163313683,"author":{"id":3560400579582064,"idStr":"3560400579582064","authorId":3560400579582064,"authorIdStr":"3560400579582064","name":"Dirsett","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":9,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":0,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"html":"<html><head></head><body><p>If All analysts are bullish, all investors would have rushed in.Its price would have run its course!! Too much hype already by then!</p></body></html>","htmlText":"<html><head></head><body><p>If All analysts are bullish, all investors would have rushed in.Its price would have run its course!! Too much hype already by then!</p></body></html>","text":"If All analysts are bullish, all investors would have rushed in.Its price would have run its course!! Too much hype already by then!","highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/352887623237704","repostId":1179507264,"repostType":2,"repost":{"id":"1179507264","kind":"news","pubTimestamp":1727149509,"share":"https://www.laohu8.com/m/news/1179507264?lang=&edition=full","pubTime":"2024-09-24 11:45","market":"us","language":"en","title":"Why I'm Downgrading Palantir Despite Strong U.S. Commercial And Government Growth","url":"https://stock-news.laohu8.com/highlight/detail?id=1179507264","media":"Seeking Alpha","summary":"SummaryPalantir's bootcamp sales methods have proven effective, driving strong U.S. commercial growth, but recent government sales surged unexpectedly, boosting overall revenue.U.S. commercial revenue","content":"<html><head></head><body><h2 id=\"id_3280655759\">Summary</h2><ul style=\"\"><li><p>Palantir&#39;s bootcamp sales methods have proven effective, driving strong U.S. commercial growth, but recent government sales surged unexpectedly, boosting overall revenue.</p></li><li><p>U.S. commercial revenue grew 70% year-over-year, while non-U.S. commercial lagged due to geopolitical factors and less bootcamp utilization.</p></li><li><p>Concerns include limited analyst participation on earnings calls, insider selling, and S&amp;P 500 inclusion having boosted the stock price.</p></li><li><p>Taken everything into account from strong U.S. commercial growth guidance, geopolitical tensions and the stock runup, I&#39;m downgrading Palantir stock to a hold.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/554bfffe59edb9acf6bf12d15a231da8\" alt=\"Palantir Technologies\" title=\"Palantir Technologies\" tg-width=\"750\" tg-height=\"500\"/><span>Palantir Technologies</span></p><p>Over the last 12 months, I wrote several articles about Palantir (NYSE:PLTR) with the premise that its Bootcamps sales methods could be a game-changer. The first one dates back to November 23&#39;. This idea is definitely not disproven in the latest quarter as sales continued to be strong. Unless there&#39;s a meaningful change in the earnings/sales trajectory of the business, I don&#39;t plan to revisit the bootcamps. I think they&#39;ve more or less proven to be very effective. In the medium term, sales growth rate is going to be the key driver of Palantir&#39;s stock price.</p><p>The problem with this last quarter is that one sales trend changed. Ever since bootcamps were introduced, U.S. commercial, as a segment, was growing at a much higher pace compared to Government.</p><p>This last quarter, Government was suddenly very strong:</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/c3154668fc232caf378b57eda67a15b6\" alt=\"Palantir revenue by segment\" title=\"Palantir revenue by segment\" tg-width=\"822\" tg-height=\"357\"/><span>Palantir revenue by segment</span></p><p>In a vacuum, that&#39;s great because government is still the largest slice of the pie. Ergo, if it shows the highest growth rate, this means Palantir&#39;s overall revenue growth rate is the highest.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/48d48fdf7201935d1792a1d5810902b5\" alt=\"Palantir Revenue by Geography\" title=\"Palantir Revenue by Geography\" tg-width=\"1004\" tg-height=\"477\"/><span>Palantir Revenue by Geography</span></p><p>However, in my last article I wrote:</p><blockquote><p>The key factor to watch will be the sustainability of U.S. commercial sales growth. This segment&#39;s ability to maintain its current momentum is crucial to maintain and increase Palantir&#39;s valuation. I don&#39;t see other segments catching up to this type of growth rates any time soon.</p></blockquote><p>It&#39;s a good thing that per the earnings call, U.S. commercial was very strong. Non-U.S. commercial wasn&#39;t (which isn&#39;t a huge problem for now) while government was strong all around:</p><blockquote><p>...Our US commercial revenue, excluding strategic commercial contracts, climbed 70% year-over-year. Our US commercial ACV closed was up 44% year-over-year and up 19% sequentially, while our deal count in US commercial was nearly twice what it was just a year ago. We maintain conviction in our ability to land new customers and subsequently expand those engagements as we sharpen our focus to taking our customers across the chasm from prototype to production...</p></blockquote><p>My reading of the segment sales trajectories over the past year is that the bootcamps have been extraordinarily useful to Palantir and its customers. These were first piloted and rolled out in the U.S. Palantir growth outside of the U.S. could be lagging for a number of reasons. Palantir sells mission-critical software, and governments and institutional customers have all been confronted by the awkwardness of global supply chains by Covid and the invasion of Ukraine. As far as I know, bootcamps haven&#39;t been utilized in Europe to the same extent either, and this explains at least part of the difference.</p><p>There were some things on the earnings call that aren&#39;t red flags, but that gave me pause. In past calls, there were also complaints about the number of salespeople the company could find. There was more color about the salesforce being ramped up and Karp even floated an idea to fly over salespeople from Europe to the U.S. as the ROI was much higher. That kind of talk has died down.</p><p>Another thing I didn&#39;t like is that there were only two bullish analysts on the call, and otherwise management took questions from shareholders. Generally, practices like this are intended to avoid hard questions. I don&#39;t think that fits well with how I understand the Palantir ethos.</p><p>Then there&#39;s been insider selling from Karp and Peter Thiel.</p><p>Finally, the company has been included in the S&amp;P 500 (SPY) and that&#39;s probably given the stock a short-term boost as well.</p><p>In the end, management guided for U.S. commercial growth above 40% going forward. To me, this is the most important number in the short to medium term. Meanwhile, there are large scale global conflicts/wars ongoing. There is a trend of increasing geopolitical tension. Governments seem to experience a greater urgency to update the capabilities of their armed forces, as well as the defensive capabilities of all infrastructure. Nvidia expects billions of sovereign spending for the year (see The Key Takeaways From The NVIDIA Earnings Call). This expansion of government AI capacity is almost certainly a tailwind for Palantir for this year and next. Taking everything, including the extraordinary runup of the stock, together; I&#39;m downgrading Palantir towards a hold, down from a strong buy.</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>Why I'm Downgrading Palantir Despite Strong U.S. Commercial And Government Growth</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\">\nWhy I'm Downgrading Palantir Despite Strong U.S. Commercial And Government Growth\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-24 11:45 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4722654-palantir-stock-despite-strong-us-commercial-and-government-growth-downgraded-to-hold><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryPalantir's bootcamp sales methods have proven effective, driving strong U.S. commercial growth, but recent government sales surged unexpectedly, boosting overall revenue.U.S. commercial revenue...</p>\n\n<a href=\"https://seekingalpha.com/article/4722654-palantir-stock-despite-strong-us-commercial-and-government-growth-downgraded-to-hold\">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/4722654-palantir-stock-despite-strong-us-commercial-and-government-growth-downgraded-to-hold","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1179507264","content_text":"SummaryPalantir's bootcamp sales methods have proven effective, driving strong U.S. commercial growth, but recent government sales surged unexpectedly, boosting overall revenue.U.S. commercial revenue grew 70% year-over-year, while non-U.S. commercial lagged due to geopolitical factors and less bootcamp utilization.Concerns include limited analyst participation on earnings calls, insider selling, and S&P 500 inclusion having boosted the stock price.Taken everything into account from strong U.S. commercial growth guidance, geopolitical tensions and the stock runup, I'm downgrading Palantir stock to a hold.Palantir TechnologiesOver the last 12 months, I wrote several articles about Palantir (NYSE:PLTR) with the premise that its Bootcamps sales methods could be a game-changer. The first one dates back to November 23'. This idea is definitely not disproven in the latest quarter as sales continued to be strong. Unless there's a meaningful change in the earnings/sales trajectory of the business, I don't plan to revisit the bootcamps. I think they've more or less proven to be very effective. In the medium term, sales growth rate is going to be the key driver of Palantir's stock price.The problem with this last quarter is that one sales trend changed. Ever since bootcamps were introduced, U.S. commercial, as a segment, was growing at a much higher pace compared to Government.This last quarter, Government was suddenly very strong:Palantir revenue by segmentIn a vacuum, that's great because government is still the largest slice of the pie. Ergo, if it shows the highest growth rate, this means Palantir's overall revenue growth rate is the highest.Palantir Revenue by GeographyHowever, in my last article I wrote:The key factor to watch will be the sustainability of U.S. commercial sales growth. This segment's ability to maintain its current momentum is crucial to maintain and increase Palantir's valuation. I don't see other segments catching up to this type of growth rates any time soon.It's a good thing that per the earnings call, U.S. commercial was very strong. Non-U.S. commercial wasn't (which isn't a huge problem for now) while government was strong all around:...Our US commercial revenue, excluding strategic commercial contracts, climbed 70% year-over-year. Our US commercial ACV closed was up 44% year-over-year and up 19% sequentially, while our deal count in US commercial was nearly twice what it was just a year ago. We maintain conviction in our ability to land new customers and subsequently expand those engagements as we sharpen our focus to taking our customers across the chasm from prototype to production...My reading of the segment sales trajectories over the past year is that the bootcamps have been extraordinarily useful to Palantir and its customers. These were first piloted and rolled out in the U.S. Palantir growth outside of the U.S. could be lagging for a number of reasons. Palantir sells mission-critical software, and governments and institutional customers have all been confronted by the awkwardness of global supply chains by Covid and the invasion of Ukraine. As far as I know, bootcamps haven't been utilized in Europe to the same extent either, and this explains at least part of the difference.There were some things on the earnings call that aren't red flags, but that gave me pause. In past calls, there were also complaints about the number of salespeople the company could find. There was more color about the salesforce being ramped up and Karp even floated an idea to fly over salespeople from Europe to the U.S. as the ROI was much higher. That kind of talk has died down.Another thing I didn't like is that there were only two bullish analysts on the call, and otherwise management took questions from shareholders. Generally, practices like this are intended to avoid hard questions. I don't think that fits well with how I understand the Palantir ethos.Then there's been insider selling from Karp and Peter Thiel.Finally, the company has been included in the S&P 500 (SPY) and that's probably given the stock a short-term boost as well.In the end, management guided for U.S. commercial growth above 40% going forward. To me, this is the most important number in the short to medium term. Meanwhile, there are large scale global conflicts/wars ongoing. There is a trend of increasing geopolitical tension. Governments seem to experience a greater urgency to update the capabilities of their armed forces, as well as the defensive capabilities of all infrastructure. Nvidia expects billions of sovereign spending for the year (see The Key Takeaways From The NVIDIA Earnings Call). This expansion of government AI capacity is almost certainly a tailwind for Palantir for this year and next. Taking everything, including the extraordinary runup of the stock, together; I'm downgrading Palantir towards a hold, down from a strong buy.","news_type":1},"isVote":1,"tweetType":1,"viewCount":52,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":110,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}