rowsan
2022-01-07
Well said but Cathie just bought
Let's Wait A Little More Before Buying Palantir
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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":695479013,"tweetId":"695479013","gmtCreate":1641563459540,"gmtModify":1641563459540,"author":{"id":3582434048223975,"idStr":"3582434048223975","authorId":3582434048223975,"authorIdStr":"3582434048223975","name":"rowsan","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":5,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":0,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p> Well said but Cathie just bought</p></body></html>","htmlText":"<html><head></head><body><p> Well said but Cathie just bought</p></body></html>","text":"Well said but Cathie just bought","highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":1,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/695479013","repostId":1198431360,"repostType":2,"repost":{"id":"1198431360","kind":"news","pubTimestamp":1641537263,"share":"https://www.laohu8.com/m/news/1198431360?lang=&edition=full","pubTime":"2022-01-07 14:34","market":"us","language":"en","title":"Let's Wait A Little More Before Buying Palantir","url":"https://stock-news.laohu8.com/highlight/detail?id=1198431360","media":"Seeking Alpha","summary":"SummaryPalantir has immense opportunity as the world seeks to harness the power of the data.The comp","content":"<html><head></head><body><p><b>Summary</b></p><ul><li>Palantir has immense opportunity as the world seeks to harness the power of the data.</li><li>The company has great software that delivers a sticky product, high margin, and a near-ubiquitous application to its service.</li><li>However, due to the absurd stock-based compensation and a high valuation, I believe it is better to wait a little more before buying Palantir.</li></ul><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/02d7c2e5739d48a7457788f40f66148c\" tg-width=\"1536\" tg-height=\"1024\" width=\"100%\" height=\"auto\"/><span>Michael Vi/iStock Editorial via Getty Images</span></p><p><b>Introduction and Thesis</b></p><p>Our future is inevitably data.Since the age of the internet, digitalization in all aspects of our society has been ongoing creating massive amounts of data. In the future, the one that can harness this data will be miles ahead of their competitors, so the ability to process this massive data is expected to be extremely valuable.</p><p>Palantir (PLTR) is a company building "software that empowers organizations to effectively integrate their data, decisions, and operations," or in other words, Plantar is the company that is at the forefront of harnessing the power of data to solve enterprise-level extremely complex problems. Thus, being a leader in this industry makes the company's fundamentals and vision extremely attractive; however, I believe it is better for investors to wait for the time being before investing in Palantir. The economic policies and the market sentiments are moving away from the expansionary policy potentially opening up the possibility for further consolidation in Palantir stocks. Further, the massive amounts of stock-based compensation (SBC) that the company is justifying are unfriendly to shareholders. I think it is better for either the company to reduce SBC or wait until the revenue growth makes SBC a smaller part of the overall revenue.</p><p><b>Fundamentals</b></p><p>Before talking about the absurd valuation and the SBC, I would like to point out the marvelous business that Palantir has briefly pointed out that the only problem that the company or the stock has is its SBC and valuation.</p><p>Palantir's business is beautiful; it can be applied to governments and commercial customers in any industry. The company has the National Institute of Health, Department of Veteran Affairs, Army, Air Force, and etc., as its government customers who utilize Palantir's software to tackle everything from defense and intelligence gathering to improving veteran patient cares. Further, Palantir's commercial software applications are as flexible as the government business. The company has numerous enterprises as its customers including L3Harris (LHX), Airbus (OTCPK:EADSF), Ferrari (RACE), Rio Tinto (RIO), and etc. improving everything from manufacturing to mining. This alone shows investors the power of harnessing the data and the opportunity Palantir has moving forward into the future.</p><p>As a result of such a promising and dynamic product, the company's operational growth and financial health have been firing on all cylinders.In 2021Q3, Palantir reported revenue of $392 million, which was 36% growth year-over-year while the customer count grew even faster at 46%. I believe customer growth promises future revenue growth because it takes months to years for revenue to meaningfully materialize, so the fact that the customer growth grew even faster than the revenue growth was significant. Further, adjusted free cash flow turned positive to $119 million compared to -$53 million 2020Q3. The adjusted operating margins continued to be at 30% while the adjusted gross margin was at an impressive 82%. The company, in simple words, is showing growth and improving operations.</p><p><b>Stock-Based Compensation</b></p><p>Despite the promising fundamental thesis and top-line growth that the company has been showing, I do not believe Palantir stock is a buy at the moment because of massive SBC. The company has been massively diluting its shareholder base through absurd SBC citing that they need to attract talent, which may be true to some extent. As the chart below shows, since the IPO on September 30th, 2020, the company's outstanding shares increased from about 900 million to 1.964 billion, which is over 100% dilution. When calculating the dilution from the start of 2021 at 1.8 billion shares, the company has diluted shareholders by 10% in 2021 alone. I think this is simply absurd and shows the unfriendly attitude of the management towards its shareholder.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/39d58178a2c717516f346622b9a5d70a\" tg-width=\"635\" tg-height=\"435\" width=\"100%\" height=\"auto\"/><span>Data by YCharts.Chart created by author using YCharts from Seeking Alpha</span></p><p>To better understand how serious the dilution or the SBC is, I created a chart below showing the stock-based compensation data throughout 2021. As you can see in the chart below, SBC consistently represented over 50% of the company's revenue. It is the biggest cost for the company, and it has been the reason why the company has been reporting a net loss.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9eef22cb497a81858cdd2c8d65756280\" tg-width=\"915\" tg-height=\"487\" width=\"100%\" height=\"auto\"/><span>Chart created by author using Source 1, Source 2, and Source 3</span></p><p>SBC is a great way to reward employees and attract talent in the market. However, Palantir, in my opinion, has been degrading shareholder value due to excessive SBC. Thus, until either the SBC shows a decreasing trend or the SBC becomes irrelevantly small in comparison to the revenue, I believe investors should think twice before investing in Palantir.</p><p><b>Financials and Valuation</b></p><p>Unlike valuations, I believe the financial health of Palantir's balance sheet is great. The company currently has about $2.3 billion in cash with about $3.2 billion in total assets while the total liability stood at only $987 million putting total liability to asset ratio (L/A) at 43%. Further, because the company generated about $240 million during operation with negligible long-term debt, I believe the financial situation of Palantir is great.</p><p>On the other hand, Palantir's valuation is slightly questionable. The company has a market capitalization of about $37 billion dollars today. The company has a high price to sales ratio of about 28 with an expected forward price to earnings ratio of about 120. It is true that the company's business is high margin and crucial, but considering the SBC and today's economic conditions, I believe this valuation may be too high. Unlike in most of 2020 and 2021, the Federal Reserve is ending the expansionary policy. Instead, they are expecting to finish tapering by March of 2022 and raise rates possible in March, which will effectively raise long-term treasury rates and decrease the investment in the stock market. Therefore, a higher valuation might have been justified in the previous 2 years, but going into 2022, I believe a higher valuation may result in either contraction or range-bound trading for the time being.</p><p><b>Summary</b></p><p>Palantir is a unique company and a perfect example of a great company but a bad stock. I truly believe in the power and the potential of Palantir's software. It can be applied in almost any industry from healthcare to defense to manufacturing. However, the company's excessive stock-based compensation and valuation hesitate me. The company has been justifying its high stock-based compensation without showing signs of stopping, and I believe this is just taking advantage of its shareholders by diluting their value. Therefore, I believe it is better to wait until stock-based compensation is either showing a decreasing trend or becoming a smaller portion of the revenue due to Palantir's continued growth.</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Let's Wait A Little More Before Buying Palantir</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nLet's Wait A Little More Before Buying Palantir\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-01-07 14:34 GMT+8 <a href=https://seekingalpha.com/article/4478236-palantir-wait-before-buying-pltr-stock><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryPalantir has immense opportunity as the world seeks to harness the power of the data.The company has great software that delivers a sticky product, high margin, and a near-ubiquitous ...</p>\n\n<a href=\"https://seekingalpha.com/article/4478236-palantir-wait-before-buying-pltr-stock\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"PLTR":"Palantir Technologies Inc."},"source_url":"https://seekingalpha.com/article/4478236-palantir-wait-before-buying-pltr-stock","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1198431360","content_text":"SummaryPalantir has immense opportunity as the world seeks to harness the power of the data.The company has great software that delivers a sticky product, high margin, and a near-ubiquitous application to its service.However, due to the absurd stock-based compensation and a high valuation, I believe it is better to wait a little more before buying Palantir.Michael Vi/iStock Editorial via Getty ImagesIntroduction and ThesisOur future is inevitably data.Since the age of the internet, digitalization in all aspects of our society has been ongoing creating massive amounts of data. In the future, the one that can harness this data will be miles ahead of their competitors, so the ability to process this massive data is expected to be extremely valuable.Palantir (PLTR) is a company building \"software that empowers organizations to effectively integrate their data, decisions, and operations,\" or in other words, Plantar is the company that is at the forefront of harnessing the power of data to solve enterprise-level extremely complex problems. Thus, being a leader in this industry makes the company's fundamentals and vision extremely attractive; however, I believe it is better for investors to wait for the time being before investing in Palantir. The economic policies and the market sentiments are moving away from the expansionary policy potentially opening up the possibility for further consolidation in Palantir stocks. Further, the massive amounts of stock-based compensation (SBC) that the company is justifying are unfriendly to shareholders. I think it is better for either the company to reduce SBC or wait until the revenue growth makes SBC a smaller part of the overall revenue.FundamentalsBefore talking about the absurd valuation and the SBC, I would like to point out the marvelous business that Palantir has briefly pointed out that the only problem that the company or the stock has is its SBC and valuation.Palantir's business is beautiful; it can be applied to governments and commercial customers in any industry. The company has the National Institute of Health, Department of Veteran Affairs, Army, Air Force, and etc., as its government customers who utilize Palantir's software to tackle everything from defense and intelligence gathering to improving veteran patient cares. Further, Palantir's commercial software applications are as flexible as the government business. The company has numerous enterprises as its customers including L3Harris (LHX), Airbus (OTCPK:EADSF), Ferrari (RACE), Rio Tinto (RIO), and etc. improving everything from manufacturing to mining. This alone shows investors the power of harnessing the data and the opportunity Palantir has moving forward into the future.As a result of such a promising and dynamic product, the company's operational growth and financial health have been firing on all cylinders.In 2021Q3, Palantir reported revenue of $392 million, which was 36% growth year-over-year while the customer count grew even faster at 46%. I believe customer growth promises future revenue growth because it takes months to years for revenue to meaningfully materialize, so the fact that the customer growth grew even faster than the revenue growth was significant. Further, adjusted free cash flow turned positive to $119 million compared to -$53 million 2020Q3. The adjusted operating margins continued to be at 30% while the adjusted gross margin was at an impressive 82%. The company, in simple words, is showing growth and improving operations.Stock-Based CompensationDespite the promising fundamental thesis and top-line growth that the company has been showing, I do not believe Palantir stock is a buy at the moment because of massive SBC. The company has been massively diluting its shareholder base through absurd SBC citing that they need to attract talent, which may be true to some extent. As the chart below shows, since the IPO on September 30th, 2020, the company's outstanding shares increased from about 900 million to 1.964 billion, which is over 100% dilution. When calculating the dilution from the start of 2021 at 1.8 billion shares, the company has diluted shareholders by 10% in 2021 alone. I think this is simply absurd and shows the unfriendly attitude of the management towards its shareholder.Data by YCharts.Chart created by author using YCharts from Seeking AlphaTo better understand how serious the dilution or the SBC is, I created a chart below showing the stock-based compensation data throughout 2021. As you can see in the chart below, SBC consistently represented over 50% of the company's revenue. It is the biggest cost for the company, and it has been the reason why the company has been reporting a net loss.Chart created by author using Source 1, Source 2, and Source 3SBC is a great way to reward employees and attract talent in the market. However, Palantir, in my opinion, has been degrading shareholder value due to excessive SBC. Thus, until either the SBC shows a decreasing trend or the SBC becomes irrelevantly small in comparison to the revenue, I believe investors should think twice before investing in Palantir.Financials and ValuationUnlike valuations, I believe the financial health of Palantir's balance sheet is great. The company currently has about $2.3 billion in cash with about $3.2 billion in total assets while the total liability stood at only $987 million putting total liability to asset ratio (L/A) at 43%. Further, because the company generated about $240 million during operation with negligible long-term debt, I believe the financial situation of Palantir is great.On the other hand, Palantir's valuation is slightly questionable. The company has a market capitalization of about $37 billion dollars today. The company has a high price to sales ratio of about 28 with an expected forward price to earnings ratio of about 120. It is true that the company's business is high margin and crucial, but considering the SBC and today's economic conditions, I believe this valuation may be too high. Unlike in most of 2020 and 2021, the Federal Reserve is ending the expansionary policy. Instead, they are expecting to finish tapering by March of 2022 and raise rates possible in March, which will effectively raise long-term treasury rates and decrease the investment in the stock market. Therefore, a higher valuation might have been justified in the previous 2 years, but going into 2022, I believe a higher valuation may result in either contraction or range-bound trading for the time being.SummaryPalantir is a unique company and a perfect example of a great company but a bad stock. I truly believe in the power and the potential of Palantir's software. It can be applied in almost any industry from healthcare to defense to manufacturing. However, the company's excessive stock-based compensation and valuation hesitate me. The company has been justifying its high stock-based compensation without showing signs of stopping, and I believe this is just taking advantage of its shareholders by diluting their value. Therefore, I believe it is better to wait until stock-based compensation is either showing a decreasing trend or becoming a smaller portion of the revenue due to Palantir's continued growth.","news_type":1},"isVote":1,"tweetType":1,"viewCount":824,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":27,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/695479013"}
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