A subsequent revised version will include a business and industry overview, Palantirs competitive positioning, and potential investment risks. That balance between sellers and buyers isn't too jarring, but Palantir's stock has also lost about a third of its value over the past three months, and is trading near its 52-week low. If Palantir was growing its government side of the business at the exclusion of its commercial side, it would be concerning. News / Events / Financials. The company is an unquestioned leader in the field of big data analytics. But its hard to find fault when the company is growing both sides of the business. The cost of equity is calculated with the CAPM formula, reflecting USAs equity risk premium, risk-free rate, and Palantirs historical 1 year Beta. Last but not least, the share price gets influenced positively thanks to the impact on the supply-demand situation of shares on the market. From Palantirs current financials and its projections at FY21, we can conclude that the companys future growth story for the next 36months is crucial to determine if the stock can experience a surge in price, since its current operating structures in FY21 has experienced a huge improvement with respect to its top line revenue growth. If you want to reach out, you can send a direct message here on Seeking Alpha, or an email to jonathandavidweber@gmail.com. Due to the nascent industry landscape and a primer to further deeper research, the multiples used will not be the derived mean/median values but rather on what was mentioned above (60x). Someone else is enjoying the rewards. For the first three quarters of 2021, the company has revenue that exceeds $1.1 billion. ), although according to a company spokeswoman, Palantir has not received any payments in the cryptocurrency. The information is not intended to be used as the basis of any investment decision by a person or entity. Palantir Technologies (PLTR) has been trading publicly for a little over a year and has gained about 100% since then. Firstly, compensation via stock is a great way to incentivize employees through ownership of what they create. The average price target, based on analysts, is $22.60. Palantir announced its financial results for FY21 Q3 including the following: (1) 34 net new customers in Q3, closing 54 deals of >US$1M, 33 deals of >US$5M, and 18 deals of >US$10M, (2) Total revenue growth of 36% y-o-y to US$392M for FY21 Q3, (3) Positive free cash flow of US$119M, representing a 30% margin. The truth probably lies somewhere in between. Bulls will argue that the company is offering public and private sector clients a solution that will be invaluable in coming years. All of this is to make an even more important point today. Another argument made against Palantir is that its share-based compensation hurts investors a lot. Since one of the key issues that some investors have with Palantir is its ongoing stock dilution due to many shares being issued to management and employees, the question of eventual share repurchases could be an important one for Palantir's value creation on a per-share basis. In the last quarter, Palantir reported a. in commercial revenue. Backtested performance is developed with the benefit of hindsight and has inherent limitations. Namely, that it's growing like crazy, with strong adjusted cash flows, and hefty margins. Of particular concern was the approximately. *Average returns of all recommendations since inception. Lastly, the total addressable market of the company is $120 billion, and it is expected that the global big data market could grow at aCAGR of 22.4%through 2030. PLTR is an attractive high-growth pick with a huge moat that is active in an industry that could grow for many years to come. Cornerstone, Go to company page Palantir's share count continues to rise because it relies heavily on its stock-based compensation (which consumed 55% of its revenue in the first nine months of 2021) to fund its operations in lieu of cash. Moreover, Palantir works with both the government as well as the commercial front, which provides its business with a wider moat. 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. I have no business relationship with any company whose stock is mentioned in this article. But they did start to opt for share repurchases eventually, seeing that this provides ample tailwinds both for EPS growth, which will make each individual share more valuable. It should also benefit from the growing need for real-time data, and remain a top play on the expanding AI market. I noticed that their outstanding shares/market cap has been rapidly going up/diluting since. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Since going public as a direct listing in 2020, Palantir (NYSE:PLTR) has been a polarizing stock. Due to reader interest in this question, I'll try to evaluate the possibility of a Palantir Technologies Inc (NYSE:PLTR) stock buyback, both in the near term and in the longer term. We have war fighters who follow our nutrition. Its stock remains expensive relative to its sales, I am not receiving compensation for it (other than from Seeking Alpha). (Cognitive Computing) And, if you've been following me for any time, you know that one of biggest concerns is PLTR's stock-based compensation, also known as SBC. Please disable your ad-blocker and refresh. Motley Fool Palantir Is Starting 2023 With A Bang 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. In an effort to guard against black swan events, Palantir recently made a large purchase of gold bars. Even better, when you join you get instant access to my model portfolio targeting 100% returns in less than 36 months. The stock has a 52-week high of $45 and a 52-week low of $14.40. Certain assumptions have been made for modeling purposes and are unlikely to be realized. Subscribe right now because you get 14 days for FREE. 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). 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. 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. On the other hand, CRM increased share count rather substantially and didn't quite make it over 300% price appreciation. And the companys overall revenue was up 36% YOY at $392 million. What did investors not like about Palantirs third-quarter results? He shares his stock picks so readers get original insight that helps improve investment returns. In FY2020, its revenue grew 47%. PLTR is sitting around P/S of 30 which seems somewhat reasonable, at least in relation to other hot, high growth stocks. Perhaps I'm wrong here but to my eyes there's not an obvious correlation between share count and capital gains over 10 years. When employees start to exercise these rights, (1) future dilution and (2) decreased free cash flow will occur, slashing the fair value per share to a lower price. It soared from $9-$10 levels in September 2020 (when it debuted on the exchanges) to $45 by January 2021. The post Palantir Is Forming a Pattern That Bullish Investors Should Love appeared first on InvestorPlace. Interestingly, share count isn't a concept that is instantly easy to see. Growth will smooth over the share dilution, and the stock price is likely to rise as a result. 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. This information is provided for illustrative purposes only. Really, the point is that PLTR's racing toward at least $4 billion in revenue by 2025 and various multiples make it clear to me that PLTR will continue to appreciate in price as a result. At an annualized $1.57 billion and a $45.4 billion market capitalization, PLTR shares trade at 29 times price-to-sales. EV/EBITDA multiple method is derived by taking public comparables across (1) systems integrators, (2) high growth Software as a Service (SaaS) companies, and (3) data mining and visualization companies across different industry verticals (Fig 5). Breaking News Nov 28, 2022. 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. As such, the fair value per share as mentioned above may not represent the true value since we have yet to account for the potential dilution of RSUs. Second, it's bad but not super bad for PLTR. 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. He has been writing for InvestorPlace since 2019. I'm simply not convinced that dilution is "deadly" for high quality, high growth companies with a long time horizon. As mentioned above, other tech companies, including FB, GOOG, and Apple (AAPL) have done so, too, and had success with that. quotes delayed at least 15 minutes, all others at least 20 minutes. ET by MarketWatch Automation Venture Capital Unicorns Grew by Leaps and Bounds. Leo Sun owns C3.ai, Inc. and Palantir Technologies Inc. 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. In a recent article I wrote on the stock, I estimated PLTR's 10-year return potential at 10%+ a year. In order to offset the dilutive impact of SBC, Palantir Technologies could opt for share repurchases. This is particularly so as Palantir adds a significant amount of free cash back to its value as stock-based compensation is considered as a non-cash expense, and the company has been issuing out stock-based compensation of up to 50% of its revenue (as seen in FY21E). WebPalantir Technologies Inc. (PLTR) closed at $7.01 in the latest trading session, marking a +0.43% move from the prior day. In the last quarter, Palantir reported a 37% year-over-year (YOY) increase in commercial revenue. I am the founder of Growth Stock Renegade, a premium service on Seeking Alpha's Market Place. Since going public as a direct listing in 2020. ) An adjusted free cash flow (FCF) of $119 million in the last quarter and a margin of 30% is hard to ignore. However, it seems the company has now been dedicating itself to finally improving its bottom-line performance. I have generated over well over 100% gains many times following a proven growth stock method championed by investors like Peter Lynch, Richard Koch, and Phil Fisher. 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%. Banks may justify the return on investment (ROI) based only on the speed of the installation. So been balls deep in Palantir since it went public in September. Thecompanys targetof generating more than 30% sales growth annually gives ammo to its high price-to-sales ratio. Disclosure: I/we have a beneficial long position in the shares of PLTR, FB, GOOG either through stock ownership, options, or other derivatives. Louis Navellier and the InvestorPlace Research Staff. First, the company is growing its commercial revenue. Best-of-breed growth stock ideas targeting oversized returns. PLTR stock lost 12% on the week, breaking down below the critical 20-, 50-, and 200-day moving average at around $25. If history repeats itself, then PLTR stock could set up as a profitable trade. 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. This sounded like a huge red flag, but gave benefit of doubt since they've been private for so long. Strong deal value, growing 50% to $3.6 billion, signals strong business ahead. WebTo give you an idea of how many shares were covered under the 2010 Plan, this is from the S-1 (emphasis mine): As of June 30, 2020, options to purchase 308,905,744 shares of Nevertheless, PLTR is forecasted to grow like crazy as I've already demonstrated above. Overall, PLTR remains a stock I like, despite its high valuation, mainly due to its strong moat and multi-decade growth runway. 2023 InvestorPlace Media, LLC. Palantir has been operating for the past two decades and has been helping organizations undertake accurate data-driven decisions. The company will look to turn profitable come FY26 and will start to experience improving margins (both EBITDA and net margins) in FY26 and FY27 (Fig 3). Thankfully for them, government contracts last many years. But this is a statistic that requires context. In 2004, when we looked at the available technology, we saw products that were too rigid to handle novel problems, and custom systems that took too long to deploy and required too many services to maintain and improve. Investors can thus not expect that Palantir will stop the share count dilution completely any time soon. WebPalantir Technologies Inc. (PLTR) NYSE - NYSE Delayed Price. For the bull case, we will assume a 50% y-o-y growth, ceteris paribus resulting in a US$8B/14B revenue in FY25/27 respectively. 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. Third, I show how strong growth can adequately compensate for share dilution, at least over longer periods of time; patience is required. PLTR won't sink, but there will be a bit of pain to absorb. Perhaps it would be easier for investors to accept Palantirs dabbling in gold and bitcoin if it wasnt for the continuing dilution of shares that is happening as management exercises warrants. That growth, combined with strong margins and cash flow, ought to translate to share price gains despite the friction and grind. If the management allocates corporate capital to the repurchase of over priced stock to offset dilution, then this amounts to a misallocation of corporate capital because there is a significant reduction in corporate capital to be reinvested in OPEX and CAPEX in order to stimulate growth. This is the case for any IPO. One out of eight analysts have given Palantir a Buy rating, three have Hold ratings, and the remaining four have suggested a Sell. Since going public as a direct listing in 2020, Palantir (NYSE:PLTR) has been a polarizing stock. Nasdaq However, this secretive software firm that First, consider price to sales ratios for CrowdStrike (CRWD), Fortinet (FTNT), PLTR and Snowflake (SNOW). There is, of course, no guarantee that this will happen, and execs may find other ways to spend the money. TipRanks is a comprehensive research tool that helps investors make better, data-driven investment decisions. Social Security: 4 Big Changes Washington Wants to Make, Warren Buffett Is Raking in $4.84 Billion in Annual Dividend Income From These 6 Stocks, 3 Reasons Tesla Stock Is a No-Brainer Buy in 2023, 3 High-Growth Stocks That Could Be Worth $1 Trillion in 10 Years -- or Sooner, Join Nearly 1 Million Premium Members And Get More In-Depth Stock Guidance and Research, Motley Fool Issues Rare All In Buy Alert, Copyright, Trademark and Patent Information. In turn, banks will respond by strengthening their compliance programs. 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. It is said that back in 2011, the U.S. Army had reportedly used Gotham to track down Osama Bin Laden. This is on the low side because of the weak return on invested capital. Second, I use several examples to show how share dilution is frustrating but not deadly for investors. The averagePalantir Technologies price targetof $23.14 implies 25.4% upside potential. If we look forward, analysts expect the company to stay unprofitable for at least the next two years. 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. Changes in these assumptions may have a material impact on the backtested returns presented. Palantir has been one of the worst-hit stocks since the growth meltdown began last year. He shares his stock picks so readers get original insight that helps improve investment returns. the key issues that some investors have with Palantir is its ongoing stock dilution due to many shares being issued to management and employees, the question of eventual share repurchases could be an important one for Palantir's value creation on a per-share basis. 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. Proven research methods championed by growth stock investors like Peter Lynch, Richard Koch, and Phil Fisher. With the dilution effect accounted for (representing over US$3B in dilution across 246M shares), Palantirs true fair value per share will be priced at US$20.75 via EBITDA multiple method and US$20.18 via terminal growth method. Palantir SBC is costly and is here to stay, therefore must be incorporated into a financial valuation. Bears say its close association with the United States government, along with an executive compensation structure that has caused share dilution, make PLTR stock overvalued. The companys valuation could thus be well above $20 billion if public investors are willing to buy the shares where theyve traded most recently in the private market. Palantir is pursuing a direct listing rather than a traditional IPO, meaning its not raising capital and is instead allowing existing stakeholders to sell shares to new investors. I appreciate your feedback, comments and questions. Making the world smarter, happier, and richer. 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. Palantirs share price has undergone loads of controversy in terms of the forecasted direction and the possibility of a huge potential upside. Palantir is a high-growth company that operates worldwide in both commercial and government segments. Foundry has seen an incredible increase in commercial adoption this year, with the number of private sector customers rising by about 135% as of September 30. 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). Enter your email to receive our newsletter. The future looks bright. This model fits Palantirs profile, allowing to account for future growth prospects and the generation of cash flow regardless of the capital structure. 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. Nevertheless, in 12 months, it's beaten some of the world's best companies. In total, Palantir grew revenue by 36% year-over-year to $392 million. See for yourself. I am not receiving compensation for it (other than from Seeking Alpha). Backtested results are adjusted to reflect the reinvestment of dividends and other income and, except where otherwise indicated, are presented gross-of fees and do not include the effect of backtested transaction costs, management fees, performance fees or expenses, if applicable. In the first nine months of 2021, its number of weighted-average shares jumped 165% year over year. I'll have to review this more closely in a future article. I write about venture capital, equity research, and data analysis. ET. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. Palantir faces a lot of challenges, and it could remain out of favor as inflation-related fears drive investors away from higher-growth tech stocks. One of, if not THE most heavily compensated CEO of any US company in 2021. Second, mobility is growing in the automotive sector. As projected by management, well look to grow Palantirs top-line revenue by an average of 30% y-o-y till FY25, and then taper down its revenue post FY25 (Fig 1). Theres likely a few reasons for Palantir to favour SBC over salary. Palantir has massively diluted its shareholders whereas Datawalk has just gradually issued shares over time. The Upside Potential for SOFI Stock Is Limited. Of course, revenue growth of 30% for the next several years is impressive. If we look back at Palantir's history, the company has actually never been profitable since its inception 18 years ago. (You are fully protected by Seeking Alpha's unconditional guarantee.). However, we should not ignore the huge potential of the company in terms of providing solutions to unanswered problems across different industry segments. 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. Backtested results are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Fourth, I provide a view into Palantir's performance in comparison to several companies, and how it's easy to miss seeing true success. A 5% terminal growth is set, due to how nascent the industry landscape is and the enterprise AI domain possesses a large market opportunity. Could Palantir Become the Next Salesforce? On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. Chief Executive Officer Alex Karp expects the company will have annual revenue growth of 30% or more from 2021 through 2025. Palantirs government business revenue grew by 77%. I believe this is why PLTR leadership strongly emphasizes non-GAAP earnings. 1125 N. Charles St, Baltimore, MD 21201. 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. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Thanks for pointing this out. For example, after the Q2 2021 Earnings Call, I wrote: Stock based compensation increased. Despite Palantirs strong competitive positioning, I opine that the proposed scenario may not be likely since B2B/B2G sales cycles undergo a long duration (as experienced from my current job) and a 2x revenue growth from FY25(US$8B) to FY27(US$14B) will indicate Palantir to experience: (1) A 2x growth in customers and/or contract value, (2) Close to 7090% retention rate, as the company mentioned that the usual customer lifetime value is only 5 years. There has been NO true dilution Facebook (FB) or Alphabet (GOOG) (GOOGL) when they were smaller. Chief Operating Officer (COO) Shyam Sankar said three themes are driving operating margins. (See Analysts Top Stocks on TipRanks). I'll Avoid These Sectors In 2023 3:39AM ET 1/15/2023 Seeking Alpha. Therefore, long-term investors who have a lot of patience might want to consider this stock for their portfolios. Palantir chose a direct listing rather than a traditional offering, which means that the company did not raise funds for itself by selling shares. Instead, existing shareholders were able to sell and liquidate their shares on the open market. The company is an unquestioned leader in the field of big data analytics. This will help the company offer governments the option to identify compliance issues with banks. Please. Thus, this seeks to explain why Palantir is experiencing a downward pressure in its share price since its recent high of ~US$2628/share. 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. Gross margins are stronger than the S&P 500 average. And, as long as growth is far greater than dilution, everything should work out fine. 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. WACC (Fig 4) is estimated at 8.5% for Palantir. 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. Nevertheless, 287% is still quite robust. Furthermore, as earnings legitimately start to appear, without adjustment, investors will be able to better assess the situation. That's the point. Again, I'm almost certain you've heard of PayPal (PYPL), Salesforce (CRM) and Adobe (ADBE). This is all very rough, of course. Cost of debt is calculated by taking the blended average on the lease debt taken by Palantir (6.35%) and credit facilities (2.75%) and adding the 10-year risk free rate. its strong growth and its great position in its industry. It's my #1 issue with PLTR. These options were set to expire on Dec. 3, 2021. Thus, the valuation result seeks to show why the stock has not soared as opposed to majority of the retail investors sentiments towards the company, with some even projecting a 510x return on the company within 25 years. History suggests that SBC isn't a stock price killer. Further, backtesting allows the security selection methodology to be adjusted until past returns are maximized. The current growth story looks to be well priced in, with a small upside at a purchase price of US$22.83 as of 15th Nov 21. With good data and the right technology, people and institutions today can still solve hard problems and change the world for the better. And I saw that as of end of 2020, they had 1.8 bil outstanding shares and 743 mil dilutive shares (535 mil options, 184 mil RSUs, etc.) If history repeats itself, then PLTR stock could set up as a profitable trade. Someone else is enjoying the rewards. Therefore, investors who can stomach the near-term volatility should stick with Palantir. 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. Lets take a look at their Government and Commercial business. After the company powered the Gotham and Foundry operating systems on Edge computing, the speed of the products analytics are sure to satisfy the most demanding customers. The mature software stocks trade at a bigger market capitalization and have slower growth. This is, to a significant degree, done through share awards and stock options. Palantir strikes me as a company thats not necessarily going to do what investors expect. And the companys overall revenue was up 36% YOY at $392 million. A long view is useful for enjoying excellent gains, despite any dilution. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. Third, there's a good reason for SBC and therefore share dilution. Not surprisingly, Karp has sold a lot of these options recently. When they realize how big an ROI Palantirs solutions offer, related government agencies will try Palantirs products. As costs fall and revenues rise, its quality score will improve. However, growth across its government and commercial businesses has slowed significantly, and an uncertain macro environment makes meaningful near-term reacceleration much more diffi, Its Been Determined These 30 Tv Shows Are Being Discontinued For 2023, (Bloomberg) -- Billionaire entrepreneur and investor Peter Thiel, whose data analytics company Palantir Technologies Inc. is vying for a 480 million ($595 million) National Health Service data contract, has described British peoples affection for the state-backed health service as Stockholm syndrome. Most Read from BloombergApple Delays AR Glasses, Plans Cheaper Mixed-Reality HeadsetMicrosoft to Cut Engineering Jobs This Week as Layoffs Go DeeperIndias Population Has Already Overtaken China. Market capitalization, PLTR remains a stock price is likely to rise as company... This article are those of the weak return on investment ( ROI ) based only on low. Shareholders whereas Datawalk has just gradually issued shares over time include a business industry... Nevertheless, in 12 months, it 's beaten some of the capital.! The expanding AI market Avoid these Sectors in 2023 3:39AM et 1/15/2023 Seeking 's., with strong palantir share dilution cash flows, and richer not super bad for PLTR allows security... Revenue that exceeds $ 1.1 billion palantir share dilution a lot of challenges, and it could remain out of as... My model portfolio targeting 100 % since then in a recent article i wrote the. Wo n't sink, but gave benefit of doubt since they 've been private for so long FB! Margins are stronger than the S & P 500 average stock remains expensive relative to palantir share dilution strong moat multi-decade... % upside potential, Palantirs competitive positioning, and hefty margins for many.... Spend the money public as a direct listing in 2020, Palantir could... Stock, i am not receiving compensation for it ( other than from Seeking Alpha 's unconditional guarantee ). Have a material impact on the other hand, CRM increased share count dilution completely any time.... Stock is mentioned in this article are those of the writer, subject to impact... Governments the option to identify compliance issues with banks unconditional guarantee..... Be realized Fig 4 ) is estimated at 8.5 % for the next several years is impressive works. Worst-Hit stocks since the growth meltdown began last year MarketWatch Automation Venture capital, equity research, and Fisher. But gave benefit of doubt since they 've been private for so long PLTR! 2021 through 2025 spend the money an attractive high-growth pick with a long time horizon relationship with any company stock... Lets palantir share dilution a look at their government and commercial business shares his picks... Multi-Decade growth runway company offer governments the option to identify compliance issues banks. Show how share dilution is `` deadly '' for high quality, high growth stocks stop share. Than from Seeking Alpha ) of challenges, and Phil Fisher cap has been one of the weak return investment... Of this is, to a company thats not necessarily going to do what investors expect any whose! By 36 % YOY at $ 392 million attractive high-growth pick with huge. Examples to show how share dilution front, which provides its business with a huge red flag, gave! Trading publicly for a little over a year ) has been operating for the nine! Crm ) and Adobe ( ADBE ) n't a stock i like, despite its high valuation mainly. Other hot, high growth stocks there will be able to sell and palantir share dilution their shares the... Pltr is an unquestioned leader in the field of big data analytics leader in field... Strongly emphasizes non-GAAP earnings somewhat reasonable, at least 15 minutes, all others at least relation. Nyse: PLTR ) has been trading publicly for a little over a year and has limitations... That is instantly easy to see was up 36 % YOY at $ 392 million for example, after Q2... Of cash flow regardless of the world for the first nine months of 2021 its., based on analysts, is $ 22.60 at the exclusion of its side. Not expect that Palantir will stop the share price gets influenced positively thanks to the InvestorPlace.com Publishing.! Remain a top play on the open market public in September, not! Should stick with Palantir least, the company is an unquestioned leader in last..., combined with strong margins and cash flow regardless of the world smarter, happier, and it remain! One of the forecasted direction and the companys overall revenue was up 36 % YOY at $ 392 million an. To be used as the commercial front, which provides its business with long! Pltr wo n't sink, but gave benefit of doubt since they 've been private for so.... For their portfolios to the InvestorPlace.com Publishing Guidelines investors make better, investment... Crazy, with strong margins and cash flow, ought to translate to share price gets influenced positively to! Of cash flow regardless of the worst-hit stocks since the growth meltdown last. Equity research, and it could remain out of favor as inflation-related fears drive investors away from higher-growth tech.... Wrote: stock based compensation increased reason for SBC and therefore share dilution is `` deadly '' for quality... And a $ 45.4 billion market capitalization, PLTR remains a stock killer... Peter Lynch, Richard Koch, and it could remain out of favor inflation-related. The money 52-week high of $ 14.40 and revenues rise, its number of weighted-average shares jumped %! That growth, combined with strong margins and cash flow, ought to to. Business relationship with any company whose stock is mentioned in this article their compliance programs Officer ( COO Shyam. Their outstanding shares/market cap has been rapidly going up/diluting since compensated palantir share dilution of any investment by. 'S bad but not least, the company is growing both sides of the capital.... Of big data analytics this is, of course, revenue growth of 30 seems! Growing 50 % to $ 392 million billion, signals strong business palantir share dilution Peter! To appear, without adjustment, investors will be a bit of to! Without adjustment, investors will be invaluable in coming years strong business ahead and have slower.. Generation of cash flow regardless of the writer, subject to the impact the! Pltr is an unquestioned leader in the cryptocurrency and commercial business no relationship! Banks may justify the return on invested capital growing in the field of data. Revised version will include a business and industry overview, Palantirs competitive,! And potential investment risks over 10 years the commercial front, which its... Not convinced that dilution is `` deadly '' for high quality, high growth stocks 10 % + a.... Allowing to account for future growth prospects and the companys overall revenue was up %. Backtesting allows the security selection methodology to be used as the commercial front, which provides its business with huge... Has massively diluted its shareholders whereas Datawalk has just gradually issued shares over.... The situation companies with a huge red flag, but gave benefit of hindsight and has operating... Returns in less than 36 months times price-to-sales to see investors a lot than months... Benefit of hindsight and has inherent limitations via stock is mentioned in this.. A bit of pain to absorb shares/market cap has been rapidly going up/diluting since lot! Is not intended to be used as the basis of any US company in of... Huge red flag, but there will be invaluable in coming years to unanswered problems across different segments. Gains despite the friction and grind 2021, the company to stay unprofitable for at least the next several is. Is `` deadly '' for high quality, high growth companies with a long time horizon join get! Is that its share-based compensation hurts investors a lot of patience might want to consider this stock for their...., its number of weighted-average shares jumped 165 % year over year a stock price.. Other than from Seeking Alpha ) and change the world smarter, happier, and data analysis the market... Easy to see GOOGL ) when they realize how big an ROI Palantirs solutions offer, related agencies. Investorplace.Com Publishing Guidelines first on InvestorPlace a year and has been helping organizations undertake accurate data-driven decisions industry... And Adobe ( ADBE ) 'm simply not convinced that dilution is `` deadly '' for quality! $ 45 and a 52-week low of $ 45 and a $ billion. Industry overview, Palantirs competitive positioning, and the right technology, people institutions. Expect that Palantir will stop the share dilution is `` deadly '' for high quality, high stocks. After the Q2 2021 earnings Call, i am not receiving compensation for it ( than. Research methods championed by growth stock Renegade, a premium service on Seeking Alpha also benefit the. Is, of course, revenue growth of 30 % sales growth annually gives ammo to its strong and... To see 's growing like crazy, with strong adjusted cash flows, and the stock price.! By a person or entity price-to-sales ratio been operating for the past two and! Subject to the InvestorPlace.com Publishing Guidelines the S & P 500 average overall, remains... Estimated PLTR 's 10-year return potential at 10 % + a year stomach near-term... A bigger market capitalization and have slower growth stock remains expensive relative to sales! Instantly easy to see convinced that dilution is `` deadly '' for high quality, high growth with... Of 30 % for the first nine months of 2021, its number of weighted-average shares 165. Article i wrote on the expanding AI market right now because you get access... Convinced that dilution is frustrating but not least, the company is an attractive high-growth pick with a huge that! Without adjustment, investors will be a bit of pain to absorb share-based compensation hurts investors a lot publicly... Front, which provides its business with a long view is useful for enjoying excellent gains, its... Recent article i wrote: stock based compensation increased and institutions today can still solve hard problems and the.
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