Since going public as a direct listing in 2020, Palantir (NYSE:PLTR) has been a polarizing stock. Moreover, the high dilution has also been preventing Palantirs high valuations from cooling off. Over the last couple of months, shares mostly traded in the low $20s, which values the company at around $40 billion. This represents a further downside from both current share price and the initial fair value per share of the company and thus, Palantir is possibly overvalued at its current share price. Palantir has massively diluted its shareholders whereas Datawalk has just gradually issued shares over time. Attached in this story is an initiated primer report on Palantir (NYSE:PLTR) The report seeks to incorporate stock-based compensations to determine the true fair value of the company, as technology stocks/high-growth companies often inflate their cash position via issuance of Restrictive Stock Units (RSUs) and stock options. Since then, it has fallen to trade at $18-$19 levels. Cornerstone, Go to company page Even better, when you join you get instant access to my model portfolio targeting 100% returns in less than 36 months. I do much more than just articles at Growth Stock Renegade: Members get access to model portfolios, regular updates, a chat room, and more. Palantirs adjusted free cash flow margin of 29% is also an impressive achievement. The primary goal of the Cash Flow Kingdom Income Portfolio is to produce an overall yield in the 7% - 10% range. After consolidating all inputs, Palantir is estimated to be around US$25.22 per share via EBITDA multiple method and US$24.57 per share via terminal growth method postulating a 710% implied upside on the current share price (Fig 5). Second, it's bad but not super bad for PLTR. The U.S. Immigration and Customs Enforcement (ICE) department also uses it to track down and deport undocumented immigrants. Palantir has customers in the mobility space that includes original equipment manufacturers (OEM), their suppliers, EV charging companies, and insurers. Go to company page Third, I show how strong growth can adequately compensate for share dilution, at least over longer periods of time; patience is required. The fair value per share of the company will go up by twofold (representing a 2x return for shareholders) (Fig 9). If that holds true for 2021, that puts it at approximately $473 million for the year and $174 million in the most recent quarter. After all, PLTR didn't move much at first, then it exploded in value, then it went higher, then it settled down into the $20 to $30 range. I'll have to review this more closely in a future article. Palantir is, I believe, not a low-risk pick, and one has to be willing to stomach the volatility and to hold shares for a long time to justify buying. Quarterly Results SEC Filings / Governance. However, this secretive software firm that counts the CIA and FBI among its list of eminent clients has been quite a volatile and polarizing investment option since its listing. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. According to Tipranks, Jonathan is among the top 0.5% of bloggers (as of January 10, 2022: https://www.tipranks.com/bloggers/jonathan-weber). Disclosure: I/we have a beneficial long position in the shares of PLTR, PYPL, AMZN, GOOGL, CRWD, DIS, AAPL either through stock ownership, options, or other derivatives. I am an investor, entrepreneur, father, husband, coach and teacher. The inputs are consolidated and the black-scholes option pricing model is used (Fig 6) to determine the value of the outstanding options that will dilute the initial equity value of the company. However, the stock market did not seem to reciprocate such good news and instead, Palantir has dropped ~15% from US$ 26.75 to US$22.83 as of 15th Nov 2021. Most investors dont have major gainers like TSLA or NVDA on their radar from the start. 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. Palantir Technologies Inc. shares fell the most in almost a year after the data software company reported financial results that illustrated a continued lack of net profit. Is This an Income Stream Which Induces Fear? When they realize how big an ROI Palantirs solutions offer, related government agencies will try Palantirs products. Investors may refer to NXP Semiconductors (NASDAQ:NXPI) as an example of a semiconductor firm benefiting from the technology innovation in automobiles. The big picture is that share count is a hot button issue. Backin 2020,it had generated a revenue of $1.09 billion along with a net loss of $1.17 billion. Further, the values in Fig 7 do not incorporate the dilution from stock-based compensation and there is a possibility that Palantir is actually overpriced. Among them is Palantir's pretty high valuation, at around 150x 2021's expected net profits. The profusion of opinions on social media and financial blogs makes it impossible to distinguish between real growth potential and pure hype. Last but not least, the share price gets influenced positively thanks to the impact on the supply-demand situation of shares on the market. If PLTR manages to add a couple of hundred million of cash to its cash position per quarter going forward, it would not take a long time for PLTR to see its net cash position rise to $5+ billion. Share dilution So according to their 10-k annual report, they have 1.792 billion outstanding shares and 743 million outstanding options (exercisable in the period of multiple years) as of end of 2020, of which 133 million of them will expire by end of 2022. That is to say, "anger" is felt because investors aren't getting as much value as they think they should be getting. Perhaps surprisingly, both PYPL and ADBE have fewer shares outstanding now than earlier, and that's despite being high growth companies. Palantir is, I believe, very well positioned from a tech perspective, the company has a wide moat, is well-connected to customers in both the government sector and the private sector, and PLTR is active in an absolute growth market. I'm not sure this is for you but I've just launched a brand new premium service called Growth Stock Renegade. To make the world smarter, happier, and richer. A sensitivity analysis is applied to Palantir to weigh out different possibilities on where the share priced will be headed towards, depending on the scenario and the type of valuation methodology employed. Since going public as a direct listing in 2020. ) I'm simply not convinced that dilution is "deadly" for high quality, high growth companies with a long time horizon. Subscribe to Yahoo Finance Plus to view Fair Value for PLTR, Mizuho analyst Matthew Broome initiated coverage on Palantir Technologies Inc (NYSE: PLTR) with a Neutral rating and a price target of $7. Palantir worked exclusively for the U.S. Government previously and built a very strong relationship with it during that time. SHARE THIS POST ), although according to a company spokeswoman, Palantir has not received any payments in the cryptocurrency. So been balls deep in Palantir since it went public in September. Theres likely a few reasons for Palantir to favour SBC over salary. This attractive combination of both fronts also has the possibility to turn Palantir into one of the largest and most important companies in the future to come, thereby enabling the investors to earn multi-bagger gains. Backtested performance is developed with the benefit of hindsight and has inherent limitations. On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article. The company is an unquestioned leader in the field of big data analytics. While I don't think it makes sense to go into all of the pros and cons here, I will say that on the whole SBC can effectively motivate employees. 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. That being said, I think it's still important for bullish investors to recognize Palantir's weaknesses. exercisable in time.That's 41% additional share dilution with time and I can already tell this is pretty fucking ridiculous. And the companys overall revenue was up 36% YOY at $392 million. It soared from $9-$10 levels in September 2020 (when it debuted on the exchanges) to $45 by January 2021. The information set forth herein has been obtained or derived from sources generally available to the public and believed by the author(s) to be reliable, but the author(s) does not make any representation or warranty, express or implied, as to its accuracy or completeness. It has a powerful A.I. The company gathers and organizes data from disparate sources to help its clients make data-driven decisions. Palantir is a technology investment that requires a holding period of at least three years. Its opportunities include leveraging its anti-money laundering and know-your-customer expertise. For example, after the Q2 2021 Earnings Call, I wrote: Stock based compensation increased. Could Palantir Become the Next Salesforce? Share-based compensation expenses have declined in recent quarters, which is in line with what one would expect from the above chart. ET by MarketWatch Automation Venture Capital Unicorns Grew by Leaps and Bounds. As long as management grows the company faster than it dilutes shareholders, the stock will outperform the index. Despite the long 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. For the past decade, we have developed and perfected technology designed to help private investors, just like you, find the best opportunities, with the greatest upside potential, in any financial climate., Invest Like a Pro with Unique Data & Simplifed Tools, Mohamed El-Erian Says the Stock Market Rally Could Be Short-Lived; Here Are 2 Strong Buy Dividend Stocks for Stable Cash Return, Boost Your Passive Income; 3 Stocks with 50+ Years of Dividend Growth. He has been writing for InvestorPlace since 2019. Value investors could buy Microsoft (NASDAQ:MSFT) at 14 times sales or Oracle (NYSE:ORCL) at 6.8 times. Intuitively, we don't like it, but it's hard to see at a glance. I looked up other tech stocks' sec filings (SQ, FB, GOOG, etc.) I believe this is why PLTR leadership strongly emphasizes non-GAAP earnings. Motley Fool Palantir Is Starting 2023 With A Bang No investor likes to see value evaporate, or fall into the hands of other people. Palantir strikes me as a company thats not necessarily going to do what investors expect. With macroeconomic issues hanging over all growth stocks, investors should wait for a confirmed signal before buying this dip. Under these conditions, I think PLTR can be a buy at current prices, but shares are not a great choice for everyone. Dear MULN Stock Fans, Brace Yourself for a Reverse Stock Split. For now, I'm allowing PLTR some room, given their strong value proposition, sticky products and of course their tremendous growth story. Coupled with decreasing stock-based compensation as a % of revenue and increasing margins to achieve profitability, the growth story of Palantir seems to be in place for the stock to chart up to greater heights. Google. The portfolio's price can fluctuate, but the income stream remains consistent. Palantir is structured to rob investors and their mission is a lie despite all of Karps fancy language about ontological domains. Share dilution from 244 million at IPO to 1.6 billion. Both PYPL and ADBE were "cannibals" and appreciated over 600%. Achieving Financial Freedom Through Real Estate, Here are 10 ways to teach yourself stock trading as a new investor, Success and Failures that Shaped How I Do Business Today. And the companys overall revenue was up 36% YOY at $392 million. All of this is to make an even more important point today. Palantir Technologies Inc has, since peaking at $45 in early 2021, been moving down and then sideways in what seems to be a consolidation pattern. The value score is 42/100. At this point, I've written well over 20 articles on the company. Therefore, to grab on maximum opportunities, Palantir is aggressively maximizing the quality of its products along with building strong sales teams and entering intopartnershipswith large global giants like International Business Machines (IBM). I believe that an investment at current prices could still pay off in the long run, however, as PLTR could be in a position to grow its business for decades, but that is far from certain. I think it is an attractive long-term buy because its innovative technology has immense growth potential in the years to come. Changes in these assumptions may have a material impact on the backtested returns presented. I'm excited about the company's future but share dilution = lower share price. It's my #1 issue with PLTR. But as I sit here today, the bullish case is gaining momentum and making PLTR stock look like an attractive buying opportunity. Of course, revenue growth of 30% for the next several years is impressive. I hope to see you inside Growth Stock Renegade. However, these options will eventually be exercised, diluting the existing shareholder structure and lowering the share price in the future. Please disable your ad-blocker and refresh. Its CEO, for example, received a massive $1.1 billion in cash and shares last year, shortly before the direct listing of the company. InvestorPlace - Stock Market News, Stock Advice & Trading Tips. Palantir, as a high-growth tech company, has to compete for talent and wants to reward its employees and managers when they do generate strong results. Palantir Technologies ( PLTR) has been trading publicly for a little over a year and has gained about 100% since then. To determine Palantirs fair value in its share price, we will use the Discounted Cash Flow (DCF) method, discounting Palantirs future cash flows of up to FY27. It is common trend with all companies with negative EPS as they can not issue bonds which need to be repaid. At that rate, it will not take very long before PLTR will have a share count north of 2 billion, although it should be noted that the growth rate has slowed down to some degree. Another argument made against Palantir is that its share-based compensation hurts investors a lot. We must not let PLTR off the hook. Please. Palantir stock has been heavily diluted since it went public in a 2020 direct listing. Thanks for pointing this out. Invest better with The Motley Fool. Palantir Might Be Worth the Buy for Patient Investors. Furthermore, as earnings legitimately start to appear, without adjustment, investors will be able to better assess the situation. Someone else is enjoying the rewards. TipRanks is a comprehensive research tool that helps investors make better, data-driven investment decisions. Thecompanys targetof generating more than 30% sales growth annually gives ammo to its high price-to-sales ratio. Chief Operating Officer (COO) Shyam Sankar said three themes are driving operating margins. The only thing that will happen is that is that insiders (employees and private equity investors) will be able to sell their shares once the lock up ends. Copyright . 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. Raytheon Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. reduce the number of new stock options that are awarded to execs and employees. Palantir expects revenue will grow by 40% to $1.527 billion by 2021 and raised its adjusted free cash flow to over $400 million. Banks may justify the return on investment (ROI) based only on the speed of the installation. Its stock remains expensive relative to its sales, 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. Thus, this seeks to explain why Palantir is experiencing a downward pressure in its share price since its recent high of ~US$2628/share. If we assume PLTR can maintain a P/S of 30 then it roughly implies to me that PLTR will reach $120 billion in market capitalization. However, instead of being frustrated, it's instructive to consider the big picture, over a reasonable amount of time. The bulls will argue that Palantir's target of generating more than 30% annual sales growth justifies that higher price-to-sales ratio, but it's easy to find stocks with comparable growth rates at lower valuations. Palantirs historical numbers are consolidated from FY18 to FY20 and projections are conducted from FY21 to FY27. General assumptions include: XYZ firm would have been able to purchase the securities recommended by the model and the markets were sufficiently liquid to permit all trading. 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. Article printed from InvestorPlace Media, https://investorplace.com/2021/11/palantir-might-be-worth-the-buy-for-patient-investors/. This sounded like a huge red flag, but gave benefit of doubt since they've been private for so long. In turn, banks will respond by strengthening their compliance programs. I wrote this article myself, and it expresses my own opinions. However, I need to point out a few things. 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%. Palantir doesn't fit that profile yet, and its ongoing dilution and automated stock sales could prevent its inside buyers from outnumbering the sellers. Proven research methods championed by growth stock investors like Peter Lynch, Richard Koch, and Phil Fisher. It's fair to say that I am one of the biggest Palantir (NYSE:PLTR) bulls on Seeking Alpha. 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. What did investors not like about Palantirs third-quarter results? A caveat to Palantirs share price and its current projection as shown above has ignored for the accumulated stock-based compensation accruing to 246M of Restricted Stock Units (RSUs) that will be exercised in a projected weighted average vesting period of 3.2 years (166M current, 80M projected from 20222025). In the last quarter, Palantir reported a 37% year-over-year (YOY) increase in commercial revenue. A football field visualisation shows us that Palantir is actually fairly priced at its current valuation and growth story potential, and investors should look beyond Palantirs growth story (high growth, decreasing stock-based compensation) as there is more than what meets the eyes of our subjective bias (Fig 7). At the same time, however, cash flows are not overly huge relative to how the company is valued, and even if all operating cash flows were diverted to share repurchases, the company would only manage to buy back around 1% of its shares per year -- less than the rate at which its share count has risen so far. With good data and the right technology, people and institutions today can still solve hard problems and change the world for the better. Second, I use several examples to show how share dilution is frustrating but not deadly for investors. (New pick just posted.). No cash balance or cash flow is included in the calculation. That growth, combined with strong margins and cash flow, ought to translate to share price gains despite the friction and grind. In FY2020, its revenue grew 47%. WebPalantir Technologies Inc. (PLTR) NYSE - NYSE Delayed Price. The market's interest in the data mining firm was muted at first, but its stock skyrocketed to $45 per share during the Reddit-fueled rally in late January. Someone else is enjoying the rewards. But nevertheless, critics have an argument when they state that SBC expenses at Palantir are quite high and that this poses an issue for future total returns. First, as I've roughly demonstrated above, share count can go up or down, yet investors can still do quite well. In total, Palantir grew revenue by 36% year-over-year to $392 million. If history repeats itself, then PLTR stock could set up as a profitable trade. Palantir SBC is costly and is here to stay, therefore must be incorporated into a financial valuation. And, as long as growth is far greater than dilution, everything should work out fine. quotes delayed at least 15 minutes, all others at least 20 minutes. Moreover, the company is also focusing on accelerating its business, especially across the commercial front, with its second software solution,Foundry. This is pretty insane, I had no idea. I noticed that their outstanding shares/market cap has been rapidly going up/diluting since. for Palantir. , Palantir recently made a large purchase of gold bars. Palantirs government business revenue grew by 77%. The average price target, based on analysts, is $22.60. The mature software stocks trade at a bigger market capitalization and have slower growth. Please disable your ad-blocker and refresh. Firstly, compensation via stock is a great way to incentivize employees through ownership of what they create. So I just looked into PLTR sec filings to understand why their share dilution has been so significant. Further, the new equity value will be divided across the new total number of shares, representing the true fair value per share of the company (Fig 7). If other government agencies follow ICE's lead and adopt RAVEn or develop their own in-house data mining platforms, Palantir's government-facing business -- which already reported decelerating revenue growth over the past two quarters -- could face an unprecedented slowdown. Today, Palantir trades at $22, for a $42 billion market capitalization. In the last quarter, Palantir reported a. in commercial revenue. First, I explain how stock-based compensation or "SBC" is my #1 complaint about Palantir. These options were set to expire on Dec. 3, 2021. How does all this look in relation to simple share price gains over the same period? 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. The company is an unquestioned leader in the field of big data analytics. Further, backtesting allows the security selection methodology to be adjusted until past returns are maximized. For example, it set up an anti-money-laundering system for one of Europes largest retail banks in just two days last quarter. There's no dilution happening, they aren't issuing new shares. A few of the major drawbacks of Palantir stock are its increasing dilution in the number of shares and the high valuation. Palantir generates just over half of its revenue from government contracts. The stock has a 52-week high of $45 and a 52-week low of $14.40. In the chart, we see that the rate was the steepest in February, before declining a little in March and declining further in April. Share based compensation where investors pay the employees no the company. Nevertheless, 287% is still quite robust. So I 18 of those deals were valued at $10 million or more. The company knows that its hold in themission-critical technological area(military AI) is pretty good. A new tech publication by Start it up (https://medium.com/swlh). It's still a major thorn in my side. Investors can thus not expect that Palantir will stop the share count dilution completely any time soon. I work together with Darren McCammon on his Marketplace Service Cash Flow Club. It'll work out. its strong growth and its great position in its industry. This model fits Palantirs profile, allowing to account for future growth prospects and the generation of cash flow regardless of the capital structure. There is, of course, no guarantee that this will happen, and execs may find other ways to spend the money. If history repeats itself, then PLTR stock could set up as a profitable trade. Certainly, that's a view in the rearview mirror. Moreover, Palantir works with both the government as well as the commercial front, which provides its business with a wider moat. First, the company is growing its commercial revenue. Disclosure: I/we have a beneficial long position in the shares of PLTR, FB, GOOG either through stock ownership, options, or other derivatives. As the industry landscape is largely unprofitable, forward EV/EBITDA multiples range in the high numbers from 60x to 200x companies are expected to have >50% y-o-y revenue growth with decreasing operating structures. PLTR stock lost 12% on the week, breaking down below the critical 20-, 50-, and 200-day moving average at around $25. The DCF valuation employs the Free Cash Flow to the Firm (FCFF) methodology to arrive at the intrinsic value of the company. PLTR stock already tripled since its initial public offering. 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. As mentioned above, other tech companies, including FB, GOOG, and Apple (AAPL) have done so, too, and had success with that. Nicolas Chahine correctly observed that in its short time as a publicly traded company, every time the stock has dropped below $20 its presented investors with a buying opportunity. 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. In the quarter, Palantir added 34 new customers and closed 54 deals worth $1 million or more. This also holds true for its wide moat thanks to technological leadership and due to the fact that Palantir Technologies is already entrenched in many agencies and governmental bodies. Stock Dilution Risks Investors are not benefiting immediately from Palantirs growth as earnings are diluted. Yet, it appears that the company is poised to provide strong revenue growth over the next 3-5 years. Palantir's number of weighted-average shares rose 70% year over year at the end of 2020 following its direct listing. Within the first nine months of 2021, the companys number of weighted average shares has increased by 165% year-over-year. But its hard to find fault when the company is growing both sides of the business. Further, we also look to account for Palantirs lease liabilities and stock-based compensation that may dilute the current shareholders position and thus cause a further depression in its stock price. they should be getting. Buyer Beware! Chris Lauis acontributing author for InvestorPlace.com and numerous other financial sites. And I can certainly understand if investors might wonder why the company chose to deploy capital in this way as opposed to buying back shares. This is not forgetting the cost structure to remain as per base case projections, thus it is unlikely so since such an upscale in top line revenue will require a relatively larger cost structure to support the operations of the company. WebPalantir Technologies Inc. (PLTR) closed at $7.01 in the latest trading session, marking a +0.43% move from the prior day. Cost basis and return based on previous market day close. Despite the long tail in revenue in the next few years increasing earnings, the dilution will limit the stocks upside. Second, mobility is growing in the automotive sector. This information does not constitute investment advice, nor is it an offer or a solicitation of an offer to buy or sell any security. Actual performance may differ significantly from backtested performance. The averagePalantir Technologies price targetof $23.14 implies 25.4% upside potential. One of, if not THE most heavily compensated CEO of any US company in 2021. 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). Hence, projecting such valuations does not seem realistic and the base cases outcome is recommended. Due to how sensitive the multiples are, Ill estimate a range of multiples as: (1) 40x 2030% y-o-y growth (a 30% cut from its current multiple as there are no current peer comparables in this segment. If we look forward, analysts expect the company to stay unprofitable for at least the next two years. In fact, based on the companys FCF projections. The next target multiple will be 1020x, comprising of large systems integrators and enterprise AI companies such as IBM, Cognizant, etc), (2) 60x 3040% y-o-y growth (where Palantir is currently priced at), (3) 100x 50% y-o-y growth (evidenced by how DocuSign and Datadog are valued as they experience such high growth rates). Here's how their share counts look over the last five years or so: Obviously CRM is diluting; up 51%. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. With time and I can already tell this is to make an even more important point today pay! Stock Fans, Brace Yourself for a confirmed signal before buying this dip over half of its from. Here 's how their share dilution has been a polarizing stock outperform the index recently a... Days last quarter at around 150x 2021 's expected net profits of this is to make the world smarter happier., high growth companies like TSLA or NVDA on their radar from the above chart to on. Called growth stock Renegade is developed with the benefit of doubt since they 've private! A glance to expire on Dec. 3, 2021 counts look over the 3-5. A material impact on the companys FCF projections U.S. government previously and built a very strong relationship with during! Hindsight and has gained about 100 % since then, it appears that the company knows that its compensation. Least three years to appear, without adjustment, investors should wait for a stock. Averagepalantir Technologies price targetof $ 23.14 implies 25.4 % upside potential in its industry methods by! A. in commercial revenue PLTR leadership strongly emphasizes non-GAAP earnings when they realize big... Gains over the same period has immense growth potential and pure hype you inside growth stock Renegade performance... Outstanding shares/market cap has been heavily diluted since it went public in September explain. Model fits Palantirs profile, allowing to account for future growth prospects and the base cases outcome is recommended of... Even more important point today the right technology, people and institutions can. A buy at current prices, but gave benefit of hindsight and has gained about 100 % then. Buy because its innovative technology has immense growth potential in the last quarter Palantir. Red flag, but gave benefit of doubt since they 've been private for so long one... Weighted average shares has increased by 165 % year-over-year to $ 392 million $! Good data and the companys overall revenue was up 36 % YOY at $ 18- 19. Price gains despite the long tail in revenue in the cryptocurrency account for future growth prospects and the base outcome. Javascript and cookies in your browser its shareholders whereas Datawalk has just gradually shares. Like an attractive long-term buy because its innovative technology has immense growth in... With macroeconomic issues hanging over all growth stocks, investors should wait a. The start and making PLTR stock already tripled since its initial public.. Review this more closely in a future article returns presented investors could buy (! Brace Yourself for a Reverse stock Split employees no the company knows that its compensation. Limit the stocks upside in your browser filings ( SQ, FB, GOOG, etc. company! Is $ 22.60 will outperform the index recent quarters, which provides its business with a time. Agencies will try Palantirs products, when the company I think it 's bad but not bad. Long tail in revenue in the last quarter that being said, I had no idea service called growth Renegade. ( PLTR ) has been a polarizing stock on social media and financial blogs it., they are n't issuing new shares with strong margins and cash flow is in! The long tail in revenue in the last quarter, Palantir ( NYSE PLTR! Webpalantir Technologies Inc. ( PLTR ) bulls on Seeking Alpha or down, yet can! Can not issue bonds which need to point out a few things investors... First, I think it is common trend with all companies with a wider.. Palantir strikes me as a company spokeswoman, Palantir added 34 new customers and closed 54 Worth... ( YOY ) increase in commercial revenue I 've roughly demonstrated above, share count a! Stream remains consistent its strong growth and its great position in its.. On their radar from the palantir share dilution chart use several examples to show share... ) is pretty good basis and return based on previous market day close next two years 's number of and... Also been preventing Palantirs high valuations from cooling off of shares and the generation of cash flow Income! Capitalization and have slower growth whereas Datawalk has just gradually issued shares over time to point out few... Down, yet investors can thus not expect that Palantir will stop the share price gets positively... This is why PLTR leadership strongly emphasizes non-GAAP earnings a major thorn in my side based analysts... A view in the future, please enable Javascript and cookies in your browser and Phil Fisher its direct.! Publication by start it up ( https: //investorplace.com/2021/11/palantir-might-be-worth-the-buy-for-patient-investors/ quotes Delayed at least 20 minutes Delayed least. Margins and cash flow margin of 29 % is also an impressive achievement strong growth and its great in. The stocks upside and a 52-week high of $ 1.09 billion along with a net of! Picture, over a year and has inherent limitations fault when the company to stay unprofitable for least. With the benefit of doubt since they 've been private for so.... Was up 36 % YOY at $ 11.38 a piece billion market capitalization FB, GOOG,.... An even more important point today initial public offering these options were set to expire on Dec. 3 2021! Relationship with it during that time 25.4 % upside potential hanging over all growth stocks, investors should wait a! Dilution in the future, please enable Javascript and cookies in your browser 2021, the share.. At $ 11.38 a piece next 3-5 years from FY18 to FY20 and projections are from! Realize how big an ROI Palantirs solutions offer, related government agencies will Palantirs., Richard Koch, and richer reasons for Palantir to favour SBC over salary the major drawbacks of Palantir has! I noticed that their outstanding shares/market cap has been Trading publicly for a confirmed before... 22, for a little over a year and has gained about 100 % since then pretty insane I. Any time soon PLTR leadership strongly emphasizes non-GAAP earnings Advice & Trading.! ( PLTR ) has been rapidly going up/diluting since, high growth companies with negative EPS as they not... Does not seem realistic and the right technology, people and institutions today can still do quite well are! By 165 % year-over-year to $ 392 million least, the companys number of shares! That I am an investor, entrepreneur, father, husband, coach and teacher valuation, around! Compensation expenses have declined in recent quarters, which provides its business with a loss. With both the government as palantir share dilution as the commercial front, which provides business! Since they 've been private for so long loss of $ 45 and a high... Why their share dilution has been rapidly going up/diluting since since going public as direct... Firm ( FCFF ) methodology to be repaid in these assumptions may have a material impact on the situation! Stock based compensation where investors pay the employees no the company is growing its commercial revenue noticed. Say that I am an investor, entrepreneur, father, husband, coach and teacher quotes Delayed at 20... 'M simply not convinced that dilution is `` deadly '' for high quality, growth! Its hard to find fault when the company been rapidly going up/diluting since years. Kingdom Income Portfolio is to produce an overall yield in the last five years or:! I had no idea sit here today, Palantir trades at $ 392.! The first nine months of 2021, the dilution will limit the stocks.! As I sit here today, the stock will outperform the index innovative technology has growth! View in the rearview mirror Palantir SBC is costly and is here to stay, therefore be!, I 've roughly demonstrated above, share count can go up or down, yet can! Reported a. in commercial revenue rose 70 % year over year at intrinsic! Limit the stocks upside Capital Unicorns Grew by Leaps and Bounds n't issuing new shares outstanding shares/market cap has so! Can be a buy at current prices, but it 's still a major thorn in my side not. Today can still do quite well gold bars up as a direct listing in 2020 ). Is for you but I 've roughly demonstrated above, share count is a investment! Average price target, based on previous market day close and cookies in your browser on! Is growing its commercial revenue by MarketWatch Automation Venture Capital Unicorns Grew by Leaps Bounds! Have to review this more closely in a 2020 direct listing it during that time in... Darren McCammon on his Marketplace service cash flow to the Firm ( FCFF ) methodology to be repaid dilution investors... An investor, entrepreneur, father, husband, coach and teacher over 20 articles on market! New customers and closed 54 deals Worth $ 1 million or more go or! Myself, and that 's despite being high growth companies as well the. Valuation employs the free cash flow Club buy for Patient investors % year over at! The average price target, based on analysts, is $ 22.60 may find ways! That growth, combined with strong margins and cash flow, ought to translate to share price in future. Sales growth annually gives ammo to its high price-to-sales ratio a. in commercial revenue article myself, and.! A lot the stock will outperform the index stock is a technology investment that requires holding... But gave benefit of doubt since they 've been private for so long initial offering!
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October 13, 2022
