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2021-09-02

If both are good, why is the price way different? $300plus versus $26plus????

Palantir Vs. Snowflake: Which Is The Better Buy

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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":812287993,"tweetId":"812287993","gmtCreate":1630590652112,"gmtModify":1632471410216,"author":{"id":3565917743458670,"idStr":"3565917743458670","authorId":3565917743458670,"authorIdStr":"3565917743458670","name":"Starlet","avatar":"https://static.tigerbbs.com/8cb20dc6decfb7da73518abf145cbc3b","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":4,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":3,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body>If both are good, why is the price way different? $300plus versus $26plus????</body></html>","htmlText":"<html><head></head><body>If both are good, why is the price way different? $300plus versus $26plus????</body></html>","text":"If both are good, why is the price way different? $300plus versus $26plus????","highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/812287993","repostId":1167000656,"repostType":2,"repost":{"id":"1167000656","kind":"news","pubTimestamp":1630545427,"share":"https://www.laohu8.com/m/news/1167000656?lang=&edition=full","pubTime":"2021-09-02 09:17","market":"us","language":"en","title":"Palantir Vs. Snowflake: Which Is The Better Buy","url":"https://stock-news.laohu8.com/highlight/detail?id=1167000656","media":"seekingalpha","summary":"Summary\n\nData is the future, and the amount of data created each day is expected to increase tremend","content":"Summary\n<ul>\n <li>Data is the future, and the amount of data created each day is expected to increase tremendously, driving strong growth in data-minded industries.</li>\n <li>Palantir and Snowflake are two behemoths in the world of data, valued at $50 billion and $88 billion respectively.</li>\n <li>Palantir is in a unique position, benefiting off both commercial and government streams, and has a solid 30% long-term annual growth target.</li>\n <li>Snowflake is one of the fastest growing names in tech, and continues to excel in most metrics, and has a long-term growth target of $10 billion in FY29.</li>\n <li>At the moment, both are rated at 'neutral' for some near-term risks, although a ten or twenty-year time horizon looks quite promising.</li>\n</ul>\nData is the future. And if that's the case, companies specializing in the realm of data, be it storage, creation, analytics, processing, or more, are going to be in that list of top picks for the future.Data never sleeps. Domo (DOMO), a cloud software company embedded and partnered with some of tech's largest names, estimated back in 2018 that the world would create about 1.7MB per data per person in 2020 - while this may seem small at first, it's over one quadrillion MB daily.\nMillions of photos and pieces of content are uploaded each minute, millions of messages are sent, millions of dollars are spent online, and more. Data is growing exponentially - hundreds of millions of more internet users are added each year, billions of connected devices are expected to be added, and cloud infrastructure and data storage capabilities could grow fivefold over the next few years.\nPopularity in the tech sector, particularly in burgeoning segments like cybersecurity, cloud software, and data applications, is high, and for good reason - companies nestled in the cloud are finding tremendous growth, and SaaS-based companies' stocks are garnering higher multiples and rising sharply over the past three months. That's especially the case in cybersecurity, another of the top long-term growth stories pushed forward by the scale of recent attacks; hyper-growth leaders CrowdStrike (CRWD) and Zscaler (ZS) both command nearly 60x TTM EV/revenue multiples, though CrowdStrike boasts a higher growth rate.\nIn the data and cloud realm, companies like Datadog (DDOG) earn a similar multiple, while Cloudflare (NET) trades at 70x TTM revenue. Palantir (PLTR) and Snowflake (SNOW), two of the behemoths in the data realm, command premium valuations just like the rest of tech's hottest names - they're worth 30x TTM revenues and 80x, respectively.\nBridging the gap between on-prem and SaaS in data-focused enterprises are Palantir and Snowflake. Palantir operates much farther along on the SaaS spectrum thanks toApollopowering Foundry's public-facing cloud SaaS infrastructure, which marks a big shift from the decade ago where Gotham was primarily operated on-prem with manual configuration, upgrades, and maintenance. Snowflake sits opposite, generating over 90% of its revenue on a consumption basis, choosing to opt away from SaaS model for its sales.\nThat model, and the data cloudplatformbehind it, which offers automated data engineering, analytics and science, lakes, warehouses, sharing, and other applications - it's the epitome of 'if it ain't broke, don't fix it'. Growth is stellar, and so are the metrics and drivers of such growth. Both of these behemoths have bright long-term growth prospects, and a booming industry that'll serve to aid such prospects - in terms of an investor, which is a better buy?\nUnrivaled Growth? By The Numbers\nHigh growth potential is typically rewarded by the market, and both of these two behemoths exhibit that - Palantir is targeting 30% long-term annual growth through 2025, while Snowflake is expected to grow at a 54% CAGR to about $4 billion in revenue by 2025. It's easy to see why investors get so excited about these two names - uniquely positioned in a growing industry with strong individual growth.\nPalantir Snapshot\nPalantir is unique in its own way, with the company having very few direct competitors to its deep data analytics business, and Gotham holds a deeper moat within the government contracting realm. Apollo's SaaS model powering both Foundry in government and commercial applications and Gotham serves as a great customer acquirer and driver of such growth.\nLong-term growth at 30% is great - but higher growth is even better. At the moment, Palantir is expected to grow about 37% y/y to reach $1.5 billion in revenues; however, it marked a second consecutive quarter of 49% growth y/y. Commercial revenue growth rate accelerated from 72% last quarter to 90%, adding 20 net new customers and seeing 32% q/q growth in commercial customers.\n<img src=\"https://static.tigerbbs.com/d88644be556636c69a0277c01fd1bb29\" tg-width=\"640\" tg-height=\"310\" width=\"100%\" height=\"auto\">Graphic fromPalantir\nGovernment revenues continued a strong trajectory - up 66% y/y, alongside new contracts with the Army, Coast Guard, Air Force, one of which is a $100 million contract with SOCOM. Other new deals included the FAA, CDC, and HHS. Consistently signing new contracts, whether large or small, attests to the government's trust of and belief in the value proposition and benefits provided by Gotham and Foundry.\nOther metrics came in strong - average revenue per its top 20 customers rose by almost 10% to $39 million, continuing its +$3 million q/q trajectory, average revenue per customer rose 19% to $7.9 million, total booked contract value rose to $925 million, up 175% y/y, and 21 new deals of at least $10 million were booked. Strong adjusted free cash flow in the first half at $201 million allowed Palantir to double cash flow guidance for the year to $300+ million. Operating margin above 30% and gross margin above 75% for the third consecutive quarter are also positives; these are all signs of a healthy and growing business executing well.\nBased on the current quarterly trajectory, Palantir could be set to reach nearly $1.53 billion in revenues for the fiscal year - this assumes a 3% beat of Q3's $385 million revenue outlook, and a ~5% q/q growth to $416 million for Q4. Strong execution, a deep order book, and rising average revenues per customer all align to support this projection, and Palantir could be set to beat these expectations by a small margin. However, the numbers don't necessarily show all the underlying strengths of Palantir's business.\nApollo is like the bread and butter of Palantir's growth - the company itself considers it as a third platform, given how crucial it is. Apollo has not only built a SaaS model for Palantir, but has allowed it to go where most other SaaS hasn't - running not just in the public cloud, but in private, classified and purpose-built government clouds. It acts as a layer between Palantir's applications and existing infrastructure. And it's just as coveted by customers - in the past two years, every new commercial customer has opted for Apollo, while nearly all of the new government customers use it for unclassified applications.\n<img src=\"https://static.tigerbbs.com/9738e11e57a08df50bfee3163c494fc3\" tg-width=\"1280\" tg-height=\"849\" width=\"100%\" height=\"auto\">Graphic fromPalantir\nPalantir has also made quite a foray into SPACs, which have beencooling offas of late (view the list below). Many of the companies that Palantir has invested in are potential disruptors, and the company has committed $290 million and already purchased 9 million shares for $53 million (the committed represents the $250 million minus the $20 million for Celularity(NASDAQ:CELU)in the first table, plus the $60 million in the second).\nSo Palantir will have about 40 million shares across nearly a dozen SPACs - a great bonus should those stocks perform well - but also a solid return on investment through contractual agreements. From these, Palantir is expecting to receive maximum revenues of $428 million from the first $250 million commitments (~71%), and $162 million on the other $93 million (~74%). These revenue streams will be recognized in the future, as contracts range from three to six to ten years.\n<img src=\"https://static.tigerbbs.com/be3984b32923702682f1c623c3c293aa\" tg-width=\"640\" tg-height=\"431\" width=\"100%\" height=\"auto\">Graphic fromPalantir\nGrowth potential and tapping into unique opportunities within SPACs, even with downside risks to share purchases as companies slump below their SPAC's $10 prices, are visible - what's also visible ishigh levels of SBCand dilutive potential. Share count has increased about 8% since December 2020, reaching 1.935 billion Class A and Class B shares outstanding. In addition, Palantir has 417.6 million options (213.4 million of which are vested and exercisable) and 166.7 million unvested and outstanding RSUs.\nThis represents about 30% of the total outstanding shares, so the dilutive effect can be quite large. However, Palantir does have a net cash balance above $2 billion and positive cash flow, so it's unlikely that it'll tap into its 20 billion authorized shares for capital, but it's just as unlikely that it'll initiate share buybacks for a few years until these vest and dilute, and cash flows and revenues are much stronger.\nSnowflake Snapshot\nSnowflake's debut on the market marked the largest-ever IPO by a software company, after raising its IPO price from an original $75-85 range up to a final pricing of $120 - shares more than doubled on the debut, reaching over $300 per share before closing slightly under $254. Salesforce.com (CRM) and Berkshire Hathaway(NYSE:BRK.A)(NYSE:BRK.B)both bought $250 million in private placement during the IPO as the market swooned for the company. Snowflake is among the largest companies to go public, valued at about $70 billion on its first close and nearly $90 billion now, but it does have the rapid growth and ability to grow into its valuation.\nWhile Snowflake opted away from setting a target growth rate, it did set a targeted revenue amount - it aims to reach $10 billion in product revenue by FY29, or calendar 2028. From FY21's $554 million, that's a 44% CAGR, a very impressive growth rate given the long frame, and much stronger than Palantir's - for comparison, Palantir's 30% targeted growth would imply revenues at $9.5-10 billion by calendar 2028, while if it had a 44% CAGR that value would be doubled, to nearly $20 billion.\nQ2's numbers looked good from a growth standpoint - and it's not just on the surface either. Product revenues continued a stellar growth trajectory, up 103% y/y, putting fiscal 22's first half total to just $85 million below fiscal 21's full year total. That's about one month's revenues, so in just 7 months this year, Snowflake has already matched last year's revenues. Quite impressive growth.\n<img src=\"https://static.tigerbbs.com/3a9c39eb33c4f8aaab5b2085ca3c75a8\" tg-width=\"640\" tg-height=\"359\" width=\"100%\" height=\"auto\">Graphic fromSnowflake\nDriving such growth is a massive growth in high-value customers, those doing more than $1 million. That customer cohort is up 107% y/y, likely driven by both a 60% y/y increase in customers to nearly 5,000 and a 34% y/y increase in Fortune 500 customers to 212 - 18 of those were added just this past quarter. The bigger the customer, the higher the likelihood that customer will spend more with Snowflake, and showing this ability to grow large-scale customers bodes well for growth.\nIn addition, over $1.5 billion in RPO for the fiscal year, up 122% y/y (lower than the previous &gt;200% growth rates for the past three quarters) and $100 million q/q, support more revenue acceleration though point to a bit of a slowdown in overall growth rate. Snowflake is unlikely to be able to grow at a triple-digit rate, settling more for the 90-95% y/y range for the current fiscal year.\nAnd while a growth slowdown may sound daunting, the numbers deep down aren't showing that. At all. Especially as Snowflake continues to grow at scale and at &gt;50-70% y/y rates for the next two to three fiscal years. Seen below, looking at Snowflake's sequential growth rates could suggest a bit of a slowdown, dropping from over 20% to just over 19% - quite small, but still lower.\nBut, looking at the sequential dollar change in revenues, they're continuing in a $6-million-more-than-the-last-quarter series: $23m, $29m, $35m, nearly $41m. Just looking at the percentages can be fooling - when this sequential series starts to slow and end is when the real growth worries will start to emerge. For now, underlying metrics aren't pointing to that.\n<img src=\"https://static.tigerbbs.com/7ed2d1d322fa38dc130482e8eabd4a16\" tg-width=\"640\" tg-height=\"373\" width=\"100%\" height=\"auto\">Data from Snowflake\nSnowflake's rapid growth has allowed it to witness great economies of scale, and that's evident within its performance metrics. Net revenue retention has hovered near 168-169% for the past three quarters, showing a tremendous ability to execute a land-and-expand model, grow revenues from within its existing customer base and generate larger renewals. Gross margins have continued to expand, with GAAP gross margin up 500 bp since FY20 and non-GAAP up 1000 bp; Snowflake has witnessed significant improvements in operating leverage from this high revenue growth.\nCosts have fallen significantly as a percentage of revenues, allowing GAAP gross profit to grow at a faster rate q/q than revenues, 340 bp higher at 22.5% for Q2. Because of larger customer deals and more renewals aiding operating leverage, Snowflake is expecting non-GAAP operating loss of just 9% for the fiscal year, compared to 38% in FY21 and 105% in FY20, while adjusted free cash flow is expected to be positive at 7% of revenues.\n<img src=\"https://static.tigerbbs.com/c0599cf44c40e29d7172044264905880\" tg-width=\"640\" tg-height=\"373\" width=\"100%\" height=\"auto\">Graphic from Snowflake\nSnowflake is a growth machine, and that growth is integral for its shares - valued at close to 80x this fiscal year's revenues, Snowflake can't afford to show any slowdowns in growth, and it hasn't yet. It has all the metrics in place to support such growth, and ambitions to reach $10 billion in product revenue by FY29, setting itself up for an impressive runway. It's got a war chest of cash to the tune of $4.1 billion in cash and short-term investments that it can use to fuel its growth.\nWhich is the Better Buy?\nFrom a long-term perspective, both companies exceed the bar when it comes to long-term growth potential, with Palantir targeting 30% annual growth to FY25 and possibly beyond, and Snowflake targeting $10 billion in revenues by FY29, or a 44% CAGR. The growth of data and data-minded applications provides large tailwinds to support such growth over the next few years to the next decade and beyond.\nYet these companies both command massive valuations, and see high investor interest. Palantir, at nearly $50 billion, and just over $1.5 billion in sales, and Snowflake, at nearly $90 billion and on a fast-track to beat $1 billion in sales this year. Richly valued, but valued for that growth and long-term promise.\nPalantir sits in a unique position, finding both commercial and government revenues to be growing at a solid clip, on top of operating metrics and interesting investments in SPACs. A pretty straightforward path to its long-term growth and customer acquisition benefits stemming from Apollo's unrivaled SaaS are two visible and less visible reasons that Palantir deserves a place in a long-term account, yet the company needs to be able to prove that it can overcome some excessive SBC and dilution in order to reward shareholders for buying in, as it continues to underperform the market.\nPalantir's evidence supporting a strong buy doesn't yet outweigh the SBC risks, and hence it earns a 'neutral' rating. Any dips back to $40 billion, or the $21-22 range, would be a tempting level to enter or add, and the next earnings report will provide a new picture on how growth is evolving for the current fiscal year's high-30% projection.\nSnowflake has had one of the quickest ramps in tech, on track to reach $1 billion in revenues just four years after recording under $100 million in revenues. An impressive long-term potential faces headwinds from one of the highest valuations in all of tech, and that's weighed heavily on shares so far this year.\nWhile a path to $10 billion revenues and a high double-digit growth rate until FY25, and one of the best land-and-expand models supported by a high NRR are two visible and less visible reasons for Snowflake's addition to a long-term portfolio, any cracks in growth or sentiment could easily dent multiples, especially at these levels. For this instance and high valuation, Snowflake is similarly rated at 'neutral', although any reversals towards May's $200-220 range would be a prime spot to add or enter at a 50-60x forward sales multiple.\nAnd while rich multiples and rich valuations aren't the end of the world, especially in tech, these companies have struggled to keep up with peers and the market in terms of shareholder returns. CrowdStrike heads into earnings at over 47x FY22 sales, one of its highest multiples, and returning 33% YTD, Bill.com (BILL) exits its earnings week at 55x FY22 sales, but has returned a stellar 108% YTD so far.\nBy comparison, Snowflake and Palantir have returned just 5% and 9% YTD, substantially underperforming the S&amp;P 500 (SPY) and NASDAQ's (QQQ) 20%. It's likely going to take time for these companies to rise into such rich multiples as growth pans out, and underperformance relative to markets could be common over some periods of time in the near term; however, for a ten or twenty-year viewpoint, the future looks very bright. These two companies have generated high interest from long-term growth, and remain poised to benefit off of the secular trends in the rise of data.","source":"seekingalpha","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>Palantir Vs. 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Snowflake: Which Is The Better Buy\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-09-02 09:17 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4452909-palantir-snowflake-stocks-which-is-the-better-buy>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nData is the future, and the amount of data created each day is expected to increase tremendously, driving strong growth in data-minded industries.\nPalantir and Snowflake are two behemoths in ...\n\n<a href=\"https://seekingalpha.com/article/4452909-palantir-snowflake-stocks-which-is-the-better-buy\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SNOW":"Snowflake","PLTR":"Palantir Technologies Inc."},"source_url":"https://seekingalpha.com/article/4452909-palantir-snowflake-stocks-which-is-the-better-buy","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1167000656","content_text":"Summary\n\nData is the future, and the amount of data created each day is expected to increase tremendously, driving strong growth in data-minded industries.\nPalantir and Snowflake are two behemoths in the world of data, valued at $50 billion and $88 billion respectively.\nPalantir is in a unique position, benefiting off both commercial and government streams, and has a solid 30% long-term annual growth target.\nSnowflake is one of the fastest growing names in tech, and continues to excel in most metrics, and has a long-term growth target of $10 billion in FY29.\nAt the moment, both are rated at 'neutral' for some near-term risks, although a ten or twenty-year time horizon looks quite promising.\n\nData is the future. And if that's the case, companies specializing in the realm of data, be it storage, creation, analytics, processing, or more, are going to be in that list of top picks for the future.Data never sleeps. Domo (DOMO), a cloud software company embedded and partnered with some of tech's largest names, estimated back in 2018 that the world would create about 1.7MB per data per person in 2020 - while this may seem small at first, it's over one quadrillion MB daily.\nMillions of photos and pieces of content are uploaded each minute, millions of messages are sent, millions of dollars are spent online, and more. Data is growing exponentially - hundreds of millions of more internet users are added each year, billions of connected devices are expected to be added, and cloud infrastructure and data storage capabilities could grow fivefold over the next few years.\nPopularity in the tech sector, particularly in burgeoning segments like cybersecurity, cloud software, and data applications, is high, and for good reason - companies nestled in the cloud are finding tremendous growth, and SaaS-based companies' stocks are garnering higher multiples and rising sharply over the past three months. That's especially the case in cybersecurity, another of the top long-term growth stories pushed forward by the scale of recent attacks; hyper-growth leaders CrowdStrike (CRWD) and Zscaler (ZS) both command nearly 60x TTM EV/revenue multiples, though CrowdStrike boasts a higher growth rate.\nIn the data and cloud realm, companies like Datadog (DDOG) earn a similar multiple, while Cloudflare (NET) trades at 70x TTM revenue. Palantir (PLTR) and Snowflake (SNOW), two of the behemoths in the data realm, command premium valuations just like the rest of tech's hottest names - they're worth 30x TTM revenues and 80x, respectively.\nBridging the gap between on-prem and SaaS in data-focused enterprises are Palantir and Snowflake. Palantir operates much farther along on the SaaS spectrum thanks toApollopowering Foundry's public-facing cloud SaaS infrastructure, which marks a big shift from the decade ago where Gotham was primarily operated on-prem with manual configuration, upgrades, and maintenance. Snowflake sits opposite, generating over 90% of its revenue on a consumption basis, choosing to opt away from SaaS model for its sales.\nThat model, and the data cloudplatformbehind it, which offers automated data engineering, analytics and science, lakes, warehouses, sharing, and other applications - it's the epitome of 'if it ain't broke, don't fix it'. Growth is stellar, and so are the metrics and drivers of such growth. Both of these behemoths have bright long-term growth prospects, and a booming industry that'll serve to aid such prospects - in terms of an investor, which is a better buy?\nUnrivaled Growth? By The Numbers\nHigh growth potential is typically rewarded by the market, and both of these two behemoths exhibit that - Palantir is targeting 30% long-term annual growth through 2025, while Snowflake is expected to grow at a 54% CAGR to about $4 billion in revenue by 2025. It's easy to see why investors get so excited about these two names - uniquely positioned in a growing industry with strong individual growth.\nPalantir Snapshot\nPalantir is unique in its own way, with the company having very few direct competitors to its deep data analytics business, and Gotham holds a deeper moat within the government contracting realm. Apollo's SaaS model powering both Foundry in government and commercial applications and Gotham serves as a great customer acquirer and driver of such growth.\nLong-term growth at 30% is great - but higher growth is even better. At the moment, Palantir is expected to grow about 37% y/y to reach $1.5 billion in revenues; however, it marked a second consecutive quarter of 49% growth y/y. Commercial revenue growth rate accelerated from 72% last quarter to 90%, adding 20 net new customers and seeing 32% q/q growth in commercial customers.\nGraphic fromPalantir\nGovernment revenues continued a strong trajectory - up 66% y/y, alongside new contracts with the Army, Coast Guard, Air Force, one of which is a $100 million contract with SOCOM. Other new deals included the FAA, CDC, and HHS. Consistently signing new contracts, whether large or small, attests to the government's trust of and belief in the value proposition and benefits provided by Gotham and Foundry.\nOther metrics came in strong - average revenue per its top 20 customers rose by almost 10% to $39 million, continuing its +$3 million q/q trajectory, average revenue per customer rose 19% to $7.9 million, total booked contract value rose to $925 million, up 175% y/y, and 21 new deals of at least $10 million were booked. Strong adjusted free cash flow in the first half at $201 million allowed Palantir to double cash flow guidance for the year to $300+ million. Operating margin above 30% and gross margin above 75% for the third consecutive quarter are also positives; these are all signs of a healthy and growing business executing well.\nBased on the current quarterly trajectory, Palantir could be set to reach nearly $1.53 billion in revenues for the fiscal year - this assumes a 3% beat of Q3's $385 million revenue outlook, and a ~5% q/q growth to $416 million for Q4. Strong execution, a deep order book, and rising average revenues per customer all align to support this projection, and Palantir could be set to beat these expectations by a small margin. However, the numbers don't necessarily show all the underlying strengths of Palantir's business.\nApollo is like the bread and butter of Palantir's growth - the company itself considers it as a third platform, given how crucial it is. Apollo has not only built a SaaS model for Palantir, but has allowed it to go where most other SaaS hasn't - running not just in the public cloud, but in private, classified and purpose-built government clouds. It acts as a layer between Palantir's applications and existing infrastructure. And it's just as coveted by customers - in the past two years, every new commercial customer has opted for Apollo, while nearly all of the new government customers use it for unclassified applications.\nGraphic fromPalantir\nPalantir has also made quite a foray into SPACs, which have beencooling offas of late (view the list below). Many of the companies that Palantir has invested in are potential disruptors, and the company has committed $290 million and already purchased 9 million shares for $53 million (the committed represents the $250 million minus the $20 million for Celularity(NASDAQ:CELU)in the first table, plus the $60 million in the second).\nSo Palantir will have about 40 million shares across nearly a dozen SPACs - a great bonus should those stocks perform well - but also a solid return on investment through contractual agreements. From these, Palantir is expecting to receive maximum revenues of $428 million from the first $250 million commitments (~71%), and $162 million on the other $93 million (~74%). These revenue streams will be recognized in the future, as contracts range from three to six to ten years.\nGraphic fromPalantir\nGrowth potential and tapping into unique opportunities within SPACs, even with downside risks to share purchases as companies slump below their SPAC's $10 prices, are visible - what's also visible ishigh levels of SBCand dilutive potential. Share count has increased about 8% since December 2020, reaching 1.935 billion Class A and Class B shares outstanding. In addition, Palantir has 417.6 million options (213.4 million of which are vested and exercisable) and 166.7 million unvested and outstanding RSUs.\nThis represents about 30% of the total outstanding shares, so the dilutive effect can be quite large. However, Palantir does have a net cash balance above $2 billion and positive cash flow, so it's unlikely that it'll tap into its 20 billion authorized shares for capital, but it's just as unlikely that it'll initiate share buybacks for a few years until these vest and dilute, and cash flows and revenues are much stronger.\nSnowflake Snapshot\nSnowflake's debut on the market marked the largest-ever IPO by a software company, after raising its IPO price from an original $75-85 range up to a final pricing of $120 - shares more than doubled on the debut, reaching over $300 per share before closing slightly under $254. Salesforce.com (CRM) and Berkshire Hathaway(NYSE:BRK.A)(NYSE:BRK.B)both bought $250 million in private placement during the IPO as the market swooned for the company. Snowflake is among the largest companies to go public, valued at about $70 billion on its first close and nearly $90 billion now, but it does have the rapid growth and ability to grow into its valuation.\nWhile Snowflake opted away from setting a target growth rate, it did set a targeted revenue amount - it aims to reach $10 billion in product revenue by FY29, or calendar 2028. From FY21's $554 million, that's a 44% CAGR, a very impressive growth rate given the long frame, and much stronger than Palantir's - for comparison, Palantir's 30% targeted growth would imply revenues at $9.5-10 billion by calendar 2028, while if it had a 44% CAGR that value would be doubled, to nearly $20 billion.\nQ2's numbers looked good from a growth standpoint - and it's not just on the surface either. Product revenues continued a stellar growth trajectory, up 103% y/y, putting fiscal 22's first half total to just $85 million below fiscal 21's full year total. That's about one month's revenues, so in just 7 months this year, Snowflake has already matched last year's revenues. Quite impressive growth.\nGraphic fromSnowflake\nDriving such growth is a massive growth in high-value customers, those doing more than $1 million. That customer cohort is up 107% y/y, likely driven by both a 60% y/y increase in customers to nearly 5,000 and a 34% y/y increase in Fortune 500 customers to 212 - 18 of those were added just this past quarter. The bigger the customer, the higher the likelihood that customer will spend more with Snowflake, and showing this ability to grow large-scale customers bodes well for growth.\nIn addition, over $1.5 billion in RPO for the fiscal year, up 122% y/y (lower than the previous >200% growth rates for the past three quarters) and $100 million q/q, support more revenue acceleration though point to a bit of a slowdown in overall growth rate. Snowflake is unlikely to be able to grow at a triple-digit rate, settling more for the 90-95% y/y range for the current fiscal year.\nAnd while a growth slowdown may sound daunting, the numbers deep down aren't showing that. At all. Especially as Snowflake continues to grow at scale and at >50-70% y/y rates for the next two to three fiscal years. Seen below, looking at Snowflake's sequential growth rates could suggest a bit of a slowdown, dropping from over 20% to just over 19% - quite small, but still lower.\nBut, looking at the sequential dollar change in revenues, they're continuing in a $6-million-more-than-the-last-quarter series: $23m, $29m, $35m, nearly $41m. Just looking at the percentages can be fooling - when this sequential series starts to slow and end is when the real growth worries will start to emerge. For now, underlying metrics aren't pointing to that.\nData from Snowflake\nSnowflake's rapid growth has allowed it to witness great economies of scale, and that's evident within its performance metrics. Net revenue retention has hovered near 168-169% for the past three quarters, showing a tremendous ability to execute a land-and-expand model, grow revenues from within its existing customer base and generate larger renewals. Gross margins have continued to expand, with GAAP gross margin up 500 bp since FY20 and non-GAAP up 1000 bp; Snowflake has witnessed significant improvements in operating leverage from this high revenue growth.\nCosts have fallen significantly as a percentage of revenues, allowing GAAP gross profit to grow at a faster rate q/q than revenues, 340 bp higher at 22.5% for Q2. Because of larger customer deals and more renewals aiding operating leverage, Snowflake is expecting non-GAAP operating loss of just 9% for the fiscal year, compared to 38% in FY21 and 105% in FY20, while adjusted free cash flow is expected to be positive at 7% of revenues.\nGraphic from Snowflake\nSnowflake is a growth machine, and that growth is integral for its shares - valued at close to 80x this fiscal year's revenues, Snowflake can't afford to show any slowdowns in growth, and it hasn't yet. It has all the metrics in place to support such growth, and ambitions to reach $10 billion in product revenue by FY29, setting itself up for an impressive runway. It's got a war chest of cash to the tune of $4.1 billion in cash and short-term investments that it can use to fuel its growth.\nWhich is the Better Buy?\nFrom a long-term perspective, both companies exceed the bar when it comes to long-term growth potential, with Palantir targeting 30% annual growth to FY25 and possibly beyond, and Snowflake targeting $10 billion in revenues by FY29, or a 44% CAGR. The growth of data and data-minded applications provides large tailwinds to support such growth over the next few years to the next decade and beyond.\nYet these companies both command massive valuations, and see high investor interest. Palantir, at nearly $50 billion, and just over $1.5 billion in sales, and Snowflake, at nearly $90 billion and on a fast-track to beat $1 billion in sales this year. Richly valued, but valued for that growth and long-term promise.\nPalantir sits in a unique position, finding both commercial and government revenues to be growing at a solid clip, on top of operating metrics and interesting investments in SPACs. A pretty straightforward path to its long-term growth and customer acquisition benefits stemming from Apollo's unrivaled SaaS are two visible and less visible reasons that Palantir deserves a place in a long-term account, yet the company needs to be able to prove that it can overcome some excessive SBC and dilution in order to reward shareholders for buying in, as it continues to underperform the market.\nPalantir's evidence supporting a strong buy doesn't yet outweigh the SBC risks, and hence it earns a 'neutral' rating. Any dips back to $40 billion, or the $21-22 range, would be a tempting level to enter or add, and the next earnings report will provide a new picture on how growth is evolving for the current fiscal year's high-30% projection.\nSnowflake has had one of the quickest ramps in tech, on track to reach $1 billion in revenues just four years after recording under $100 million in revenues. An impressive long-term potential faces headwinds from one of the highest valuations in all of tech, and that's weighed heavily on shares so far this year.\nWhile a path to $10 billion revenues and a high double-digit growth rate until FY25, and one of the best land-and-expand models supported by a high NRR are two visible and less visible reasons for Snowflake's addition to a long-term portfolio, any cracks in growth or sentiment could easily dent multiples, especially at these levels. For this instance and high valuation, Snowflake is similarly rated at 'neutral', although any reversals towards May's $200-220 range would be a prime spot to add or enter at a 50-60x forward sales multiple.\nAnd while rich multiples and rich valuations aren't the end of the world, especially in tech, these companies have struggled to keep up with peers and the market in terms of shareholder returns. CrowdStrike heads into earnings at over 47x FY22 sales, one of its highest multiples, and returning 33% YTD, Bill.com (BILL) exits its earnings week at 55x FY22 sales, but has returned a stellar 108% YTD so far.\nBy comparison, Snowflake and Palantir have returned just 5% and 9% YTD, substantially underperforming the S&P 500 (SPY) and NASDAQ's (QQQ) 20%. It's likely going to take time for these companies to rise into such rich multiples as growth pans out, and underperformance relative to markets could be common over some periods of time in the near term; however, for a ten or twenty-year viewpoint, the future looks very bright. These two companies have generated high interest from long-term growth, and remain poised to benefit off of the secular trends in the rise of data.","news_type":1},"isVote":1,"tweetType":1,"viewCount":6,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":65,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/812287993"}