Certainly, that's a view in the rearview mirror. Thecompanys targetof generating more than 30% sales growth annually gives ammo to its high price-to-sales ratio. its strong growth and its great position in its industry. Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates Read full disclaimer >, Tired of arriving late to the Big Returns Party?. Intuitively, we don't like it, but it's hard to see at a glance. Within thefirst nine months of 2021, its revenue improved substantially by 44% to $1.11 billion and the net loss also narrowed down to $364 million from $1.02 billion. Stock Dilution Risks Investors are not benefiting immediately from Palantirs growth as earnings are diluted. The real question isn't compensation but dilution and share count. Palantir has a strong moat that gives customers an edge. We believe there are no alternatives that can compete on cost, speed, and performance.. Despite a slight pessimistic sentiment towards Palantirs valuation, there is a possibility that the company may experience >30% y-o-y revenue growth (Fig 8). The Upside Potential for SOFI Stock Is Limited. Palantir Technologies ( PLTR) has been trading publicly for a little over a year and has gained about 100% since then. Valuation is tricky with a heavy amount of stock-based compensation or "SBC", but once you adjust and give PLTR's leadership room to handle it, the numbers are satisfactory, if not excellent. In the last quarter, Palantir reported a. in commercial revenue. On the other, bears are not wrong to criticize Palantir's cash-burning problem and excessive stock-based compensation, which keeps diluting shareholders to oblivion. I have also generated over $30 million in online sales through my own business activities, along with several million dollar producing partners and affiliates. Gross margins are stronger than the S&P 500 average. (You are fully protected by Seeking Alpha's unconditional guarantee.). We must continue to watch SBC and dilution like hawks. Luke Lango will reveal how you could start collecting cash payouts like $4,600 in 48 days or $12,000 in 21 days, without touching risky options or any other confusing investments. At the same time, with a P/S of 50 it reaches $200 billion, whereas with a P/S of 20 it reaches $80 billion. In FY2020, its revenue grew 47%. In the first nine months of 2021, its revenue rose 44% year over year to $1.11 billion, while its net loss narrowed from $1.02 billion to $364 million. I love investing and business, and I also greatly enjoy working with amazing people. If history repeats itself, then PLTR stock could set up as a profitable trade. I noticed that their outstanding shares/market cap has been rapidly going up/diluting since. PLTR's unique software can create significant operational value for its customers, and ongoing global disruptions like the pandemic and war can help to catalyze adoption further. On the Stockrover stock grading site, Palantir stock has a fair quality and valuation score. The portfolio's price can fluctuate, but the income stream remains consistent. It primarily offers two solutions, namely Gotham and Foundry, which are software solutions for government departments and commercial companies respectively, and Apollo, the operating system for both those software. Analyst Report: Palantir Technologies Inc. NYSE - Nasdaq Real Time Price. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. These options were set to expire on Dec. 3, 2021. If we look forward, analysts expect the company to stay unprofitable for at least the next two years. Palantir is a technology investment that requires a holding period of at least three years. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com, Palantir Is Forming a Pattern That Bullish Investors Should Love, VW US CEO: Customer reaction to ID.4 EV 'has been incredible,' with 20K on backorder, Oil Flipflops as US Growth Fears Counter Chinas Growth Outlook, UPDATE 1-NASA awards $425 mln to Boeing for fuel-efficient airliner research project, EU drug regulator has not seen signal of possible Pfizer COVID shot stroke link, David Rubenstein says the Fed will settle for 'tolerable' 3% inflation, doesn't see imminent recession. It is, of course, possible that their models are wrong and do either overvalue or undervalue Palantir, but as a base case, it makes sense to assume that shares do not trade too far from fair value right now. Instead, it's a drag. That is to say, "anger" is felt because investors aren't getting as much value as they think they should be getting. At an annualized rate of close to $500 million, PLTR trades at an operating cash flow multiple in the 80s, however, which is far from inexpensive. They do still offer equity to key talent, but thanks to their huge profitability and large size, dilution isn't a major concern any longer, especially since these companies have started buyback programs to offset the dilutive effect of shares being issued to employees and executives. It's fair to say that I am one of the biggest Palantir (NYSE:PLTR) bulls on Seeking Alpha. And as Hake notes, even if investors have to wait two years for the stock to hit that target, they would still get an average annual return of 29.54%. Ultimately, I believe that the value of the shares is fairly priced (or even slightly overpriced) and the catalysts will definitely be reliant on (1) revenue growth, and (2) stock-based compensation payout as % of the companys cost structure. Due to the fact that a high-growth company also has many Just as it looked as though Palantir Technologies (NYSE:PLTR) would rally again, its quarterly earnings rained on its parade. values the company at around $40 billion. Therefore, it is aggressively investing in sustaining its position and presenting itself as the only viable military AI option for the democracies intending to withstand the technological advances and espionage threats on them. As such, an entry into Palantir could be wise in the US$1921 region and initiating covered call positions (up to 90 days out) since movement of the share price will likely be very muted till the release of every quarterly financial results to review the companys growth potential and cost structure. Palantir Technologies Inc. stock rises Monday, outperforms market Jan. 9, 2023 at 5:18 p.m. However, this secretive software firm that counts the CIA and FBI among its list of eminent clients has been quite a volatile and polarizing investment option since its listing. This is almost perfectly in line with the consensus price target of $21.80, thus shares are pretty fairly valued, according to the analyst community. Governance Documents Executive Management Board of Directors Committee Composition / Resources. 5 Hypergrowth Stocks With 10X Potential in 2023. Raytheon So been balls deep in Palantir since it went public in September. The company is an unquestioned leader in the field of big data analytics. Disclosure: I/we have a beneficial long position in the shares of PLTR, PYPL, AMZN, GOOGL, CRWD, DIS, AAPL either through stock ownership, options, or other derivatives. So I just looked into PLTR sec filings to understand why their share dilution has been so significant. Someone else is enjoying the rewards. To make the world smarter, happier, and richer. Karp: Look were part of the group that was ridiculed in Silicon Valley for our dietary standards. Palantir Technologies is not yet profitable, but its continued success in both the public and private sectors will give the companys operations the necessary boost and drive it towards profitability along with bestowing the investors with market-beating returns. Louis Navellier and the InvestorPlace Research Staff. PLTR stock lost 12% on the week, breaking down below the critical 20-, 50-, and 200-day moving average at around $25. Please disable your ad-blocker and refresh. Further, backtesting allows the security selection methodology to be adjusted until past returns are maximized. quotes delayed at least 15 minutes, all others at least 20 minutes. In order to offset the dilutive impact of SBC, Palantir Technologies could opt for share repurchases. Secondly, its a non-cash expense, so Palantir doesnt technically have to outlay any cash to pay for these expenses, so its ability to generate cash flow from operations is not hindered and this would help the company to reinvest in itself. For example, Palantir is helping the National Health Service (NHS) analyze information for millions of patients. There are also some issues that should not be neglected, however, such as Palantir's valuation and its high SBC. Nevertheless, in 12 months, it's beaten some of the world's best companies. Feast your eyes on their share counts over the last 10 years or so. Once again, let's see how all this compares to share price gains over the same period of time. I wrote this article myself, and it expresses my own opinions. And, as long as growth is far greater than dilution, everything should work out fine. In an effort to guard against black swan events, Palantir recently made a large purchase of gold bars. The future looks bright. That might seem like a major improvement, but investors should recall that Palantir's net loss was inflated by its direct listing expenses last year. Invest better with The Motley Fool. Palantir said in its prospectus that 1.86 billion shares will be subject to a lockup agreement, which extends for 180 days after the debut. Palantirs valuation as a private company topped $20 billion in 2015, when the company sold shares at $11.38 a piece. Expect the company to win more customers in the coming year. If you have an ad-blocker enabled you may be blocked from proceeding. Fourth, I provide a view into Palantir's performance in comparison to several companies, and how it's easy to miss seeing true success. On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. exercisable in time.That's 41% additional share dilution with time and I can already tell this is pretty fucking ridiculous. However, we should not ignore the huge potential of the company in terms of providing solutions to unanswered problems across different industry segments. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. But its hard to find fault when the company is growing both sides of the business. The company gathers and organizes data from disparate sources to help its clients make data-driven decisions. Bulls will argue that the company is offering public and private sector clients a solution that will be invaluable in coming years. Guard against black swan events, Palantir is helping the National Health Service ( NHS ) analyze for! To find fault when the company in terms of providing solutions to unanswered problems across different segments! Growing both sides of the world smarter, happier, and performance quality and valuation score biggest Palantir NYSE. A piece happen in the field of big data analytics from Palantirs as... 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