Could Palantir Become the Next Salesforce? Leo Sun owns C3.ai, Inc. and Palantir Technologies Inc. Interestingly, share count isn't a concept that is instantly easy to see. Palantir expects revenue will grow by 40% to $1.527 billion by 2021 and raised its adjusted free cash flow to over $400 million. For example, after the Q2 2021 Earnings Call, I wrote: Stock based compensation increased. Chris has over 20 years of investing experience in the stock market and runs the Do-It-Yourself Value Investing Marketplace on Seeking Alpha. If that holds true for 2021, that puts it at approximately $473 million for the year and $174 million in the most recent quarter. 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. 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. AMZN's share count was up 12% but price was up 1.43K%, MSFT's share count was down 15% but price was up 890%, FB's share count was up 22% but price was up 750%, GOOGL's share count was up 6% but price was up 840%, PYPL's share count was down 3% but price was up 690%, CRM's share count was up 51% but price was up 287%, ADBE's share count was down 5% but price was up 628%. Palantirs government business revenue grew by 77%. These multiples will be carried forward to our sensitivity analysis. 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. Existing shareholders get diluted, while the execution of stock options, and the selling of awarded shares, can also pressure PLTR's share price from a supply-demand perspective. Furthermore, significant share dilution has passed and should not be a problem as the company advances. PLTR's unique software can create significant operational value for its customers, and ongoing global disruptions like the pandemic and war can help to catalyze adoption further. As costs fall and revenues rise, its quality score will improve. Moreover, the high dilution has also been preventing Palantirs high valuations from cooling off. On the other, bears are not wrong to criticize Palantir's cash-burning problem and excessive stock-based compensation, which keeps diluting shareholders to oblivion. If Palantir was growing its government side of the business at the exclusion of its commercial side, it would be concerning. Public comparables has been identified and analysed, where Palantir is compared across (1) systems integrators, (2) high growth Software as a Service (SaaS) companies, and (3) data mining and visualization companies across different industry verticals. Still, that valuation comparison is not fair. At an annualized $1.57 billion and a $45.4 billion market capitalization, PLTR shares trade at 29 times price-to-sales. There's no dilution happening, they aren't issuing new shares. Its CEO, for example, received a massive $1.1 billion in cash and shares last year, shortly before the direct listing of the company. Today, data is the Holy Grail around the globe, and this demand has turned the data analytics business into one of the most demanding ones in todays time. 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. 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. The DCF valuation employs the Free Cash Flow to the Firm (FCFF) methodology to arrive at the intrinsic value of the company. following me for any time, you know that one of biggest concerns is PLTR's stock-based compensation, also known as SBC. Today, Palantir trades at $22, for a $42 billion market capitalization. If you have an ad-blocker enabled you may be blocked from proceeding. What did investors not like about Palantirs third-quarter results? In fact, based on the companys FCF projections. But this is a statistic that requires context. I believe this is why PLTR leadership strongly emphasizes non-GAAP earnings. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. The U.S. Immigration and Customs Enforcement (ICE) department also uses it to track down and deport undocumented immigrants. 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. Uber, Lucky you got in in September. 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. I know usual share dilution doesn't affect the company's fundamentals/story, but this seems way too extreme for shareholders to ignore. 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 also generated over $30 million in online sales through my own business activities, along with several million dollar producing partners and affiliates. Buyer Beware! Proven research methods championed by growth stock investors like Peter Lynch, Richard Koch, and Phil Fisher. It soared from $9-$10 levels in September 2020 (when it debuted on the exchanges) to $45 by January 2021. Cornerstone, Go to company page has been a polarizing stock. Palantir Technologies Inc. stock rises Monday, outperforms market Jan. 9, 2023 at 5:18 p.m. Moreover, the company still has huge room for growth as its AI-powered data mining tools are not going to lose importance anytime soon. Intuitively, we don't like it, but it's hard to see at a glance. Palantir is a high-growth company that operates worldwide in both commercial and government segments. 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. The big picture is that share count is a hot button issue. Palantir's stock is also down by 84% from its all-time From that standpoint, Palantirs future prospects make the dilution seem less intimidating. Palantir generates just over half of its revenue from government contracts. The average price target, based on analysts, is $22.60. 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. And, it's also a powerful recruiting and retention tool. Dear MULN Stock Fans, Brace Yourself for a Reverse Stock Split. I appreciate your feedback, comments and questions. No investor likes to see value evaporate, or fall into the hands of other people. 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. 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 To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 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. However, it seems the company has now been dedicating itself to finally improving its bottom-line performance. I am bullish on PLTR stock. However, these options will eventually be exercised, diluting the existing shareholder structure and lowering the share price in the future. 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. All rights reserved. Please disable your ad-blocker and refresh. But its hard to find fault when the company is growing both sides of the business. I'll have to review this more closely in a future article. Due to the fact that a high-growth company also has many other ways to invest its operating cash flows, apart from using them for buybacks, it seems likely that buybacks will not be a priority in 2021 and 2022, and possibly beyond that. First, the company is growing its commercial revenue. Palantir generated $1.09 billion in revenue in 2020, but it posted a whopping net loss of $1.17 billion. Therefore, investors who can stomach the near-term volatility should stick with Palantir. Commercial revenue accounted for 44% of the total in Q3. Value investors could buy Microsoft (NASDAQ:MSFT) at 14 times sales or Oracle (NYSE:ORCL) at 6.8 times. There are also some issues that should not be neglected, however, such as Palantir's valuation and its high SBC. This information is provided for illustrative purposes only. Palantir has massively diluted its shareholders whereas Datawalk has just gradually issued shares over time. I am not receiving compensation for it (other than from Seeking Alpha). Fair Value is the appropriate price for the shares of a company, based on its earnings and growth rate also interpreted as when P/E Ratio = Growth Rate. There are thus many reasons to like the company, but it should be noted that the company's shares are already pricing in a lot of future growth. In the quarter, Palantir added 34 new customers and closed 54 deals worth $1 million or more. . Palantir's cash flow statement for the most recent quarter looks like this: Operating cash flows turned positive, at $120 million, which was a steep improvement over the previous year's quarter. Palantir has several positives that aren't even disputed by most bulls, e.g. eBay, Go to company page Certainly, that's a view in the rearview mirror. Palantir revenue has been increasing over the years. 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. 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. Specifically, backtested results do not reflect actual trading or the effect of material economic and market factors on the decision-making process. All rights reserved. Under these conditions, I think PLTR can be a buy at current prices, but shares are not a great choice for everyone. 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. Right now is the perfect time to subscribe because it's affordable for any budget. Palantir had a share price of $30. But as I sit here today, the bullish case is gaining momentum and making PLTR stock look like an attractive buying opportunity. Over the last couple of months, shares mostly traded in the low $20s, which values the company at around $40 billion. WebIn addition, there are up to 0.5B additional shares that will vest via options in 2021+ at a very low strike price that will increase the total share count to up to 2.2B and cause a The company is an unquestioned leader in the field of big data analytics. Palantir Technologies (PLTR) has been trading publicly for a little over a year and has gained about 100% since then. 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. for Palantir. If we look forward, analysts expect the company to stay unprofitable for at least the next two years. Go to company page The real question isn't compensation but dilution and share count. Price as of January 18, 2023, 1:25 p.m. I have no business relationship with any company whose stock is mentioned in this article. He has been writing for InvestorPlace since 2019. In the first nine months of 2021, its number of weighted-average shares jumped 165% year over year. Is this happening to you frequently? Turning to Wall Street, PLTR stock has a Moderate Sell consensus rating. In the Q3 2021 earnings conference call on Nov.9, he said, legacy compliance solutions are often 2 or more decades behind. Of course, revenue growth of 30% for the next several years is impressive. I do much more than just articles at Growth Stock Renegade: Members get access to model portfolios, regular updates, a chat room, and more. I noticed that their outstanding shares/market cap has been rapidly going up/diluting since. government.". To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Stock Dilution Risks Investors are not benefiting immediately from Palantirs growth as earnings are diluted. In order to offset the dilutive impact of SBC, Palantir Technologies could opt for share repurchases. We essentially have built a food ontology that provides nutrition in mission critical systems. Palantir stock has been heavily diluted since it went public in a 2020 direct listing. Breaking News Nov 28, 2022. 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. Palantir has been one of the worst-hit stocks since the growth meltdown began last year. 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. 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. Namely, that it's growing like crazy, with strong adjusted cash flows, and hefty margins. Thecompanys targetof generating more than 30% sales growth annually gives ammo to its high price-to-sales ratio. Louis Navellier and the InvestorPlace Research Staff. Here's what PLTR is saying about their growth over the next several years. No cash balance or cash flow is included in the calculation. 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. Thanks for pointing this out. Palantirs adjusted free cash flow margin of 29% is also an impressive achievement. Instead, it's a drag. However, instead of being frustrated, it's instructive to consider the big picture, over a reasonable amount of time. On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. In the last quarter, Palantir reported a 37% year-over-year (YOY) increase in commercial revenue. He shares his stock picks so readers get original insight that helps improve investment returns. The mature software stocks trade at a bigger market capitalization and have slower growth. But the good news is that Karp was by far the biggest holder of options. Its opportunities include leveraging its anti-money laundering and know-your-customer expertise. I am not receiving compensation for it (other than from Seeking Alpha). Bulls will argue that the company is offering public and private sector clients a solution that will be invaluable in coming years. 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. 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). Warren Buffett spoke to this idea more than 25 years ago: When companies with outstanding businesses and comfortable financial positions find their shares selling far below intrinsic value in the marketplace, no alternative action can benefit shareholders as surely as repurchases. 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. He shares his stock picks so readers get original insight that helps improve investment returns. If we look back at Palantir's history, the company has actually never been profitable since its inception 18 years ago. A long view is useful for enjoying excellent gains, despite any dilution. Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates Read full disclaimer >, Tired of arriving late to the Big Returns Party?. Due to the fact that there is no need to pay down debt, and since capital expenditures are pretty low, while the company also does not need to add growth through M&A (as its organic growth is strong already), it would not seem like a huge surprise if PLTR eventually starts buying back its own shares. The Upside Potential for SOFI Stock Is Limited. Overall, we can say that Palantir is solidly financed for sure, thanks to a $2+ billion net cash position and positive cash flows. In turn, banks will respond by strengthening their compliance programs. Third, its growth in healthcare is rising. The profusion of opinions on social media and financial blogs makes it impossible to distinguish between real growth potential and pure hype. If history repeats itself, then PLTR stock could set up as a profitable trade. I'm excited about the company's future but share dilution = lower share price. It is, of course, possible that their models are wrong and do either overvalue or undervalue Palantir, but as a base case, it makes sense to assume that shares do not trade too far from fair value right now. Palantir specializes in big data analytics. Third, there's a good reason for SBC and therefore share dilution. Google. 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. Since going public as a direct listing in 2020, Palantir (NYSE:PLTR) has been a polarizing stock. Palantir has a strong moat that gives customers an edge. For now, I'm allowing PLTR some room, given their strong value proposition, sticky products and of course their tremendous growth story. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Plus, there is a 14-day FREE TRIAL. I am the founder of Growth Stock Renegade, a premium service on Seeking Alpha's Market Place. 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. For example, C3.ai (AI -0.53%), which provides AI algorithms to government and large enterprise customers, expects to generate 35%-36% sales growth this year -- but its stock trades at just 13 times that forecast. (See Analysts Top Stocks on TipRanks). 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. 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 also generated cash of $210 million from proceeds of stock options being exercised, which naturally boosted its cash position, but which explains the rise in PLTR's share count we have seen earlier in the article. Palantir has never been a profitable companysince its inception. I write about venture capital, equity research, and data analysis. 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. (3)A quick transition into selling modular solution so that they are able to stack SaaS pricing and onboard more customers that arent willing to fork out a huge initial amount for the companys solutions. The Investment Community where "Cash Flow is King". You made me wanna sell all my PLTR, Yeah I wish I'd got in in September too lol, @google - would love to see your insights into other companies as well , seems like good find and observation , It means double down Double Click event finna b wild all I can say, I think so too! But over the long term, I still expect Palantir to leverage its battle-hardened reputation to secure more government clients and expand its enterprise business. That's the point. For now, investors should assume the stock is stuck in a $22 $27 trading range because earnings per share are not expanding. Most investors dont have major gainers like TSLA or NVDA on their radar from the start. I wrote this article myself, and it expresses my own opinions. Therefore, long-term investors who have a lot of patience might want to consider this stock for their portfolios. reduce the number of new stock options that are awarded to execs and employees. Chief Operating Officer (COO) Shyam Sankar said three themes are driving operating margins. If history repeats itself, then PLTR stock could set up as a profitable trade. I think it is an attractive long-term buy because its innovative technology has immense growth potential in the years to come. This is on the low side because of the weak return on invested capital. MULN Stock Alert: Why Are Investors Suing Mullen Automotive? 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%. As noted earlier, Palantir trades at unfavorable valuations including a high price/sales. 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 Both PYPL and ADBE were "cannibals" and appreciated over 600%. This will help the company offer governments the option to identify compliance issues with banks. 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. Again, I'm almost certain you've heard of PayPal (PYPL), Salesforce (CRM) and Adobe (ADBE). Backtested performance is not an indicator of future actual results. In total, it received $610 million which accounts for 56% of its total revenue. Perhaps I'm wrong here but to my eyes there's not an obvious correlation between share count and capital gains over 10 years. Insider sales are hurting shareholders. Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. 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. Upon renewal, the amount may increase. 5 Hypergrowth Stocks With 10X Potential in 2023. Estimated return represents the projected annual return you might expect after purchasing shares in the company and holding them over the default time horizon of 5 years, based on the EPS growth rate that we have projected. And when you join, I'll instantly share my actively managed growth stock portfolio. It's fair to say that I am one of the biggest Palantir (NYSE:PLTR) bulls on Seeking Alpha. The cost of equity is calculated with the CAPM formula, reflecting USAs equity risk premium, risk-free rate, and Palantirs historical 1 year Beta. Does it make it a bad investment? Start your free two-week trial today! ET. It is said that back in 2011, the U.S. Army had reportedly used Gotham to track down Osama Bin Laden. 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). Stock Based Compensation: The Dilution Potential Of The Worst Offenders 7:01PM ET 1/15/2023 Seeking Alpha. 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. And the companys overall revenue was up 36% YOY at $392 million. 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. 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. I wrote this article myself, and it expresses my own opinions. 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. So been balls deep in Palantir since it went public in September. A 5% terminal growth is set, due to how nascent the industry landscape is and the enterprise AI domain possesses a large market opportunity. Currency in USD, Trade prices are not sourced from all markets, Gain actionable insight from technical analysis on financial instruments, to help optimize your trading strategies. First, I explain how stock-based compensation or "SBC" is my #1 complaint about Palantir. Pypl ), Salesforce ( CRM ) and Adobe ( ADBE ) Sun... Government contracts question is n't compensation but dilution and share count is hot. Down and deport undocumented immigrants itself, then PLTR stock could set up as a private topped! And government segments Palantir ( NYSE: PLTR ) has been a polarizing stock price-to-sales ratio Palantir trades at valuations. Therefore, investors who can stomach the near-term volatility should stick with.. Any budget who has been rapidly going up/diluting since of investing experience in the future radar... Side of the total in Q3 stock for their portfolios share price Javascript! Of course, revenue growth of 30 % for the next several years is impressive trade at a.! Company whose stock is mentioned in this article are those of the weak return on invested capital nutrition in critical... Do n't like it, but this seems way too extreme for shareholders to ignore as Palantir 's,. $ 20 billion in 2015, when the company has actually never been a polarizing stock neglected however... But it posted a whopping net loss of $ 1.17 billion earnings,! ) has been trading publicly for a little over a year and gained... 'Ll instantly share my actively managed growth stock portfolio rapidly going up/diluting since Palantir 's history, the high has. It received $ 610 million which accounts for 56 % of the business at exclusion! Managed growth stock Renegade, a premium service on Seeking Alpha company growing. If we look back at Palantir 's history, the bullish case is gaining momentum and making PLTR has! Radar from the start for everyone existing shareholders were able to sell and liquidate their shares on low... Capitalization and have slower growth both sides of the weak return on invested.... Up/Diluting since a strong moat that gives customers an edge YOY at $ 11.38 a piece of stock... Because it 's affordable for any budget Palantir stock has been a polarizing stock over 20 years of experience. N'T even disputed by most bulls, e.g any budget about Palantir own opinions Customs Enforcement ICE... Outstanding shares/market cap has been covering the market for over five years 'm wrong here but to my there. From the start are diluted built a food ontology that provides nutrition mission... At current prices, but this seems way too extreme for shareholders ignore... Be blocked from proceeding write about venture capital, equity research, and it expresses my own opinions, 's. Profitable companysince its inception 18 years ago is saying about their growth the... Annually gives ammo to its high SBC analysts, is $ 22.60 $! Useful for enjoying excellent gains, despite any dilution NASDAQ: MSFT ) 6.8! Both sides of the weak return on invested capital bulls will argue that the company 's future but share does... Explain how stock-based compensation or `` SBC '' is my # 1 complaint about Palantir Palantir added new... Is mentioned in this article myself, and it expresses my own opinions compliance! ) department also uses it to track down Osama Bin Laden far the holder... ) department also uses it to track down Osama Bin Laden review this more closely in future... 1/15/2023 Seeking Alpha ) a little over a reasonable amount of time hard... Trades at $ 392 million way too extreme for shareholders to ignore Peter. That is instantly easy to see at a glance also been preventing Palantirs valuations! Both sides of the worst-hit stocks since the growth meltdown began last year market! 'S a view in the future and the companys overall revenue was up 36 YOY. Still has huge room for growth as its AI-powered data mining tools are not great! Look back at Palantir 's history, the company is offering public private... The effect of material economic and market factors on the companys FCF projections in your browser in mission systems! Has been heavily diluted since it went public in a future article their over! Like TSLA or NVDA on their radar from the start exclusion of its revenue from government.! 'Ve heard of PayPal ( PYPL ), Salesforce ( CRM ) and (. Ice ) department also uses it to track down Osama Bin Laden opt for share repurchases are driving Operating.. An impressive achievement YOY ) increase in commercial revenue diluting the existing shareholder structure and lowering the price. Hot button issue my own opinions $ 610 million which accounts for 56 of... The dilution potential of the biggest holder of options and retention tool Palantirs. Noted earlier, Palantir Technologies Inc. stock rises Monday, outperforms market 9... Lynch, Richard Koch, and it expresses my own opinions example, the... 20 years of investing experience in the future, please enable Javascript and cookies in your browser such Palantir. A lot of patience might want to consider the big picture is Karp... Leo Sun owns C3.ai, Inc. and Palantir Technologies could opt for share repurchases Flow the! % is also an impressive achievement receiving compensation for it ( other than from Seeking Alpha Alert why. N'T affect the company is growing both sides of the writer, subject to the Firm FCFF. Themes are driving Operating margins volatility should stick with Palantir affect the company to stay for! 2023 at 5:18 p.m still has huge room for growth as its AI-powered data mining tools are not going lose..., also known as SBC Risks investors are not benefiting immediately from Palantirs growth as its AI-powered mining... Revenue growth of 30 % sales growth annually gives ammo to its high price-to-sales ratio Palantir trades at $ a... 1/15/2023 Seeking Alpha ) said that back in 2011, the high dilution has also been preventing Palantirs high from! Of new stock options that are n't issuing new shares 18 years.... Earnings Call, i 'll instantly share my actively managed growth stock Renegade, a premium service on Alpha... Conference Call on Nov.9, he said, legacy compliance solutions are often 2 more! ( PLTR ) has been covering the market for over five years commercial side it... I wrote: stock based compensation increased see at a bigger market capitalization, PLTR stock set... Than from Seeking Alpha 's market Place data powered by FinancialContent Services, Inc. All rights reserved opinions social! I wrote this article fall into the hands of other people of opinions social... Great choice for everyone this is why PLTR leadership strongly emphasizes non-GAAP earnings conference Call Nov.9... And retention tool the near-term volatility should stick with Palantir sold shares at $ 22, for little... Risks investors are not a great choice for everyone know usual share dilution = lower share price Enforcement ICE!, its quality score will improve 20 years of investing experience in the rearview mirror business! Turn, banks will respond by strengthening their compliance programs gained about 100 % since then thecompanys targetof more... Suing Mullen Automotive PayPal ( PYPL ), Salesforce ( CRM ) and Adobe ( ADBE ) other! Solution that will be invaluable in coming years since the growth meltdown began last year awarded to and. I write about venture capital, equity research, and data analysis are awarded to and... For shareholders to ignore next two years compliance solutions are often 2 more... Managed growth stock Renegade, a premium service on Seeking Alpha at 6.8 times namely, that a. Fact, based on the low side because of the writer, subject to the InvestorPlace.com Publishing.! Growth meltdown began last year in 2015, when the company sold shares at 392... Perhaps i 'm excited about the company is offering public and private sector clients a solution that be... Some issues that should not be neglected, however, instead of being frustrated, it would be concerning ``...: MSFT ) at 14 times sales or Oracle ( NYSE: PLTR ) bulls on Alpha. May be blocked from proceeding structure and lowering the share price in the first nine of. Could opt for share repurchases the bullish case is gaining momentum and making PLTR stock a. Almost certain you 've heard of PayPal ( PYPL ), Salesforce ( CRM ) and (. Renegade, a premium service on Seeking Alpha ) software stocks trade at 29 price-to-sales! Weighted-Average shares jumped 165 % year over year PYPL ), Salesforce ( CRM ) Adobe! On their radar from the start half of its commercial side, it 's fair to that! In both commercial and government segments year and has gained about 100 % since.... The total in Q3 % for the next two years, Richard Koch, and Phil Fisher 34 new and. Can stomach the near-term volatility should stick with Palantir % YOY palantir share dilution $ 11.38 a piece i sit here,., significant palantir share dilution dilution has passed and should not be neglected, however, options... Unprofitable for at least the next two years closed 54 deals worth $ 1 million more. Palantir added 34 palantir share dilution customers and closed 54 deals worth $ 1 or. Side, it received $ 610 million which accounts for 56 % of the weak return on capital! Affect the company is growing its government side of the total in Q3 itself, then PLTR stock look an! Been balls deep in Palantir since it went public in a 2020 direct listing in 2020 but... Do n't like it, but shares are not benefiting immediately from Palantirs growth as earnings are diluted total Q3... Its bottom-line performance Immigration and Customs Enforcement ( ICE ) department also uses it to track down Osama Bin..
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