But the company also forecasted current-quarter sales above estimates. Its optimism stemmed from a boost in Q commercial revenue and a steady flow of government contracts. Earnings season is here in full force, but continued sell-offs in the stock market have some investors doubting their portfolios and scratching their heads. Big data analytics company Palantir Technologies (PLTR 1.49%) reported strong earnings this week, yet the stock is down a whopping 16% over the last five trading days.
- For a good reason, many financial advisors sing the praises of a well-diversified portfolio — distributing your money across several sectors and types of investments can help spread risk.
- We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period.
- Another thing I think is interesting about Palantir is its hybrid crossover into cybersecurity.
- In comparison, Snowflake saw Revenue grow 173% from $97 million in FY’19 to about $265 million in FY’20, although the growth rate is likely to slow down to roughly 110% over the current fiscal, based on consensus figures.
- Analysts and investors alike will be keeping a close eye on the performance of Palantir Technologies Inc. in its upcoming earnings disclosure.
How do the companies compare in terms of business models, revenue growth rates, and margins? While we thought Palantir’s valuation was attractive at levels of about $10 (see our comparison of Palantir and Snowflake below), we think its richly valued right now. While this is still behind the likes of Datadog (which trades at 50x estimated 2020 Revenues) and Snowflake (over 150x), Palantir does have some unique risks. Firstly, Palantir typically benefits from significant economic and geopolitical uncertainty, and the Covid-19 pandemic and the related recession were likely big drivers of growth this year. However, with the availability of a highly effective Covid vaccine looking likely by early 2021, things could start to return to normal, potentially hurting growth.
View analysts price targets for PLTR or view top-rated stocks among Wall Street analysts. Using the Nasdaq-100 as a proxy for tech stocks and multiplying the index’s forward earnings multiple of 29 with Palantir’s projected earnings of $1.90 after five years points toward a stock price of $55. However, a slowdown in government spending means that Palantir’s 2023 revenue growth of 16% would be its slowest since the time it went public in late 2020. With the government business accounting for 55% of Palantir’s top line in the third quarter of 2023, it is not surprising to see why tepid government spending is likely to weigh on the company’s growth.
Some of the reasons for investors’ bearish sentiment are Palantir’s heavy dependence on government contracts, high competition and significant losses. Government intelligence agencies and health organizations use it to fight terrorism and track infectious diseases. Palantir’s data mining played a significant role in finding Osama Bin Laden’s location. Heading into today, shares of the company had 0% over the past month, lagging the Business Services sector’s gain of 0.44% and the S&P 500’s gain of 1.58% in that time. Palantir generated an operating cash flow of $333 million for the 2021 calendar year, compared to a negative $297 million during the year prior.
NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. naga broker Our estimates are based on past market performance, and past performance is not a guarantee of future performance. By not selling to countries or companies that are antithetical to its mission and cultural values, Palantir has self-restricted its growth opportunities.
However, suppose your portfolio is already quite partial to technology investments like Palantir. In that case, it may be worth asking yourself if another investment in the sector makes sense or only further skews your holdings. The company is a creation of Silicon Valley, but has tried to distance itself from the region by moving its headquarters to Colorado and slamming tech’s “engineering elite” in its prospectus. Remember though, that there are many ways to estimate a company’s value, and a DCF is just one method. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model.
Foundry
2022 will be an important investment year for Palantir, and investors with a long-term time horizon may have a chance to invest in a company well-positioned for future growth at a low point. Management has made it clear that it has a very specific and well-thought-out roadmap for growth. As the company hires more salespeople and continues investing in the commercial sector, Palantir’s use cases should grow across different industries worldwide.
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Over Q1 2021, commercial revenues stood at $133 million, up just about 19% year over year, well below the government business, which grew by 76% to $208 million. This is problematic for Palantir, as the government business has lower levels of transparency, with investors also valuing government contractors at lower multiples. If these efforts pay off, it could help Palantir’s stock, as well.
The easiest way you can buy Palantir shares is with an online broker. To save you time and money, Benzinga compiled a list of some of the best online brokers. In this guide, Benzinga explores Palantir’s past and deep dives into the company’s operations and future. Based on our research, we believe these estimate revisions are directly related to near-team stock moves.
It also facilitates the handoff from analysts to operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform. Palantir Technologies was incorporated in 2003 and is headquartered in Denver, CO. 14 Wall Street analysts have issued “buy,” “hold,” and “sell” ratings for Palantir Technologies in the last twelve months.
Technology
He has also served as a member of the board of directors since 2003. But he earned $797.9 million worth of options and $296.4 million for stock rewards. The Centers for Disease Control and Prevention (CDC) announced in February 2022 that it granted Palantir a contract to support distribution and supply chain efforts for drugs. Palantir’s business model consists of acquiring, expanding and scaling.
Foundry enables organizations to make better decisions by closing the loop between analytics and operations. It integrates data in hours, allowing decision-makers to act swiftly. The software captures decisions and transformations in real time and feeds them back into the originating system. For these reasons, investors should exercise some patience with Palantir.
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Although Palantir’s stock price has tumbled for the last 12 months, the company’s earnings have consistently grown. Palantir’s revenue increased in Q and for the year, and it expects to increase revenue in Q1 2022. Palantir’s Q earnings were $433 million, a 34% increase year over year. The company’s commercial and government revenue increased from the previous year.
Cash from operations was $344 million for 2021, representing a 22% margin. Palantir developed software that helps organizations solve complex problems using data. Palantir sells its data-mining platforms to governments and corporations to prevent terrorist attacks and tracking of infectious diseases. It generates revenue from its Foundry, Gotham and Apollo products. Artificial intelligence (AI) stocks have propelled the stock market to a surprisingly strong year in 2023.
Relative to the current share price of US$16.4, the company appears quite undervalued at a 43% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope – move a few degrees and end up in a different galaxy. We now https://traderoom.info/ need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.2%.