With our recent coverage of the Stake trading platform, we have had a lot of requests asking us to cover some US-listed stocks. Palantir Stock has grown revenues YoY at a rate >20% for the last 4 years, currently turns over US$1billion in revenue, however, still at this time makes an operating loss. Are things going to change for Palantir? This is Should I Buy Palantir Stock.
About Palantir Stock
From the Palantir Stock Website: At Palantir, we build software that lets organizations integrate their data, their decisions, and their operations into one platform. Our software empowers entire organizations to answer complex questions quickly by bringing the right data to the people who need it.
Palantir is listed on the New-York Stock Exchange under the ticker PLTR:NYSE
Palantir Technologies Inc. is a software company that builds enterprise data platforms for use by organizations with complex and sensitive data environments. From building safer cars and planes to discovering new drugs and combating terrorism, Palantir helps customers across the public, private, and non-profit sectors transform the way they use their data.
Palantir supplies software to government organisations and some of the largest companies in the world. Palantir has some high-value names on the list including, the US Department of Defence, Rio Tinto, 3M, Fujitsu and NHS, just to name a few.
What is Palantir Foundry?
Foundry is a first-class data integration and management platform. A comprehensive suite of analytical tools and an operational platform with tools for business users. Palantir believe Foundry should be the central support tool for business decision making. I.e the software helps users to make sense of Big Data Sets.
Foundry helps users to visualise big data sets, mapping massive amounts of data into a view from multiple data sets to enrich decision making in real time. i.e a supply chain analyst would be able to quickly identify and fix supply chain issues in real time.
From the company website regarding the integration with ASX:RIO. Palantir’s software will integrate raw data from a multitude of disparate sources into a representation of critical mining operations. Rio Tinto will be able to make decisions and take actions using a single source of truth that combines operational and transactional data. This data resource will be available, with the necessary security and privacy controls, to its frontline and office-based workers. You can now start to see how much of an impact to the bottom line real-time critical decision making would have on activities such as these.
What is Palantir Gotham?
Palantir Gotham is THE OPERATING SYSTEM FOR GOVERNMENT DECISION MAKING. Against urgent and rapidly evolving circumstances, Gotham accelerates and improves decision making across any battlespace — connecting intelligence and operations, echelons, and multi-domain staffs.
Decisions reflect the most recent understanding of the world, incorporating all tradeoffs and dependencies. When it’s time to act, missions are tasked, tracked, and assessed in Gotham end to end. Palantir Gotham has a set of combined tools designed for semantic, temporal, geospatial, and full-text analysis. The suite operates as an organization’s knowledge base, it keeps the entire analysis database and ensures users’ full protection.
For example, Gotham was used in the September 2018 hurricane response in North and South Carolina. The platform assisted National Operations Center and Field Teams could collaborate on planning and executing six consecutive operations. They combined publicly available flood data with weather information and social vulnerability census data to find the communities in greatest need. It’s the critical real-time data feedback that allows this platform to be the best in class technology.
Palantir Stock Price
The Palantir Stock Price has been on a little bit of a roller coaster ride since listing in October 2020 at US$10. The stock is now valued at US$40.5 billion and trades at US$21.47 per share. The 52-week range is $8.90 – $45.00, hence the stock is now trading towards the lower end of the 52-week range.
The 1-year share price performance is up 114%, compared to the S&P return of ~18%. Investors, who participated in the IPO would be sitting on some very convincing gains at the time being.
Should I Buy Palantir Shares: Competitors
From the company intelligence platform Craft, Palantir has 3 main competitors. However, in our opinion none of these technologies actually can directly compete with Palantir and the company is actually in a class of its own when is comes to the product offerings.
For example, Tableau offers simply nowhere near the features that users of PLTR come to expect and would not actually be considered a replacement. The closest software to PLTR in our opinion is SnowFlake (NYSE:SNOW), however, this platform once again lacks many of the features offered by PLTR, whilst being valued at a massive US$74billion at the time of writing.
Should I Buy Palantir Stock: Dividend History
PLTR:NYSE does not currently pay a dividend. We do not expect the company to be looking to pay a dividend in the near future, and typically of US-listed tech shares may instead focus on growing their ROE internally and giving back to shareholders by increasing the share price. PLTR:NYSE is very much in the growth phase of its lifecycle.
Should I Buy Palantir Stock: Investor Sentiment
After surveying 340 Investors about their current PLTR:NYSE shares sentiment: BUY-HOLD-SELL, as well as their target price over the next 12-months here are the results;
Palantir Price Predictions
The average Palantir Price Prediction from the investor community survey was for the following periods, listed below:
1 Year: $50 / share
5 year: $125 / share (I.e 2025 Palantir Share Price Prediction)
So Taking into account the above, members of the Prophet community were extremely bullish on the price targets for the PLTR:NYSE share price over the 1 year and 5-year forecasts.
Insider Ownership And Trading
PLTR is largely owned by the General Public with 67% ownership. Institutions own 16%, and individual insiders own 10.1%. This is relatively standard for a large fast-growing tech company. We would have liked to have seen a slightly higher rate of insider ownership of the share.
The company boasts some very large names and legendary investors such as Cathy Wood’s ARK Invest and Peter Thiel, who holds around 7% of the company.
|5.72%||Sompo Holdings, Inc.||107,526,881||$2.3b|
|1.35%||The Vanguard Group, Inc.||25,302,593||$543.2m|
|1.21%||Eight Partners VC, LLC||22,730,805||$488.0m|
|0.99%||ARK Investment Management LLC||18,632,471||$400.0m|
We are a big fan of ARK invest and Peter Thiel and are typically always interested in how and when they choose to deploy their capital. It would be good to see ARK or Thiel start buying shares on-market again to help spur investor interest and confidence in the stock.
Should I Buy Palantir Stock: Fundamentals
|Dividend Yield||N/A (does not pay a dividend)|
|Debt / Equity||~11%|
Palantir expects its revenue to rise more than 30% for the full year FY2021, while analysts expect around 35% growth in the Full Year.
Should I Buy PLTR Stock: Financials
From past income statements, you can see that Palantir is growing revenues at a significant rate, 24.7% and 47.2% for FY2019 and FY2020 respectively. PLTR do, however, turn an operating loss of US$1.16billion in the FY2020 period. This is however in line with PLTR strategy, the CEO has mentioned previously that it costs the company significantly when onboarding new customers, however, this starts to turn positive in periods after the system has been set up.
From the historical balance sheet positions of the company, you can see that PLTR has Total assets currently at US$3.014billion. Total Liabilities are currently sitting at US$1.20billion. The company have a significant portion of cash and cash equivalents on hand at just over US$2 billion. This amount cover liabilities significantly.
Palantir is in our opinion a visionary company and is the best in class solution for visualising big data sets in real-time. Gotham and Foundry boast some massive companies, and typically the companies that have used PLTR previously has realised savings or operational efficiencies from using the software typically extending contracts for additional terms and purchasing additional bolt-on capabilities.
Palantir is growing revenues at a significant rate, 24.7% and 47.2% for FY2019 and FY2020 respectively. PLTR do, however, turn an operating loss of US$1.16billion in the FY2020 period. The CEO has previously mentioned that the company will become more profitable in subsequent periods after retaining key customers after onboarding.
PLTR has Total assets currently at US$3.014billion. Total Liabilities are currently sitting at US$1.20billion. The company have a significant portion of cash and cash equivalents on hand at just over US$2 billion.
Our thesis on PLTR is, that once a significant portion of new customers continues to renew contracts this will start reducing PLTR’s cost base on each sale. As customers re-new the Net Profit margin should continue to improve the company bottom-line profitability.
We are bullish on the future of Palantir shares.
Please Remember all Articles Published on Prophet Invest are Opinion Only
Learn How We Analyze A Company:
What Are We Currently Buying?
In the past few weeks here are some exciting companies we jumped in on: