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2021-09-03

Well I’m a bull on PLTR on a long term perspective. Though I’m not sure if it will explode, but a good position to hold in one’s tech portfolio

Palantir's Share Price Will Explode When Taking The Amazon Factor Into Account

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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":815339397,"tweetId":"815339397","gmtCreate":1630641960419,"gmtModify":1631890916127,"author":{"id":3575375342391732,"idStr":"3575375342391732","authorId":3575375342391732,"authorIdStr":"3575375342391732","name":"ChowCCJ","avatar":"https://static.tigerbbs.com/bc5fafdf3c6b7c87a4217f2f73a89adb","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":12,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body>Well I’m a bull on PLTR on a long term perspective. Though I’m not sure if it will explode, but a good position to hold in one’s tech portfolio&nbsp;</body></html>","htmlText":"<html><head></head><body>Well I’m a bull on PLTR on a long term perspective. Though I’m not sure if it will explode, but a good position to hold in one’s tech portfolio&nbsp;</body></html>","text":"Well I’m a bull on PLTR on a long term perspective. Though I’m not sure if it will explode, but a good position to hold in one’s tech portfolio","highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/815339397","repostId":1129167710,"repostType":4,"repost":{"id":"1129167710","kind":"news","pubTimestamp":1630641141,"share":"https://www.laohu8.com/m/news/1129167710?lang=&edition=full","pubTime":"2021-09-03 11:52","market":"us","language":"en","title":"Palantir's Share Price Will Explode When Taking The Amazon Factor Into Account","url":"https://stock-news.laohu8.com/highlight/detail?id=1129167710","media":"seekingalpha","summary":"Summary\n\nMany criticize Palantir for its stock-based compensation scheme. Bulls, conversely, often c","content":"Summary\n<ul>\n <li>Many criticize Palantir for its stock-based compensation scheme. Bulls, conversely, often compare Palantir to Amazon.</li>\n <li>I belong to the bull camp. With the compensation scheme, Palantir is investing in its most important asset, its employees, and thus in further growth.</li>\n <li>I doubled my holding in Palantir after the 2Q figures. I expect the share price to explode as soon as the market recognizes the disruptive nature of Palantir's business.</li>\n <li>Nevertheless, I am aware of the risks. Despite the good prospects, Palantir is not an all-in position.</li>\n</ul>\nIntroduction\nDisclaimer beforehand: After announcing the 2Q figures, I doubled my holding in Palantir (PLTR). This makes Palantir the only company in my portfolio that does not generate a profit. My readers know that my basic approach to investing is relatively simple (simple is good). I invest in profitable companies that generate cash flow and either distribute it or use it to generate further growth. I made an exception to this rule with Palantir. And I feel pretty good about it.\nFrom my point of view, the company is a fascinating investment. The share is costly (it already was at the IPO), and the share price has already priced in an unquestionable success story. And yes, Alex Karp does crazy things. Palantir buys gold bars and allows payments in cryptocurrencies. Nevertheless, the Palantir share is an excellent investment opportunity for investors with a long-term investment horizon of 10 years or more and with the patience to endure tougher corrections. It is quite possible that in 10 or 20 years, we will look back with envy at today.\nPalantir is not profitable\nThe elephant in the room for me is the lack of profitability. As an investor, I want to invest in profitable companies. My investment shouldput food on my table. It should not burn money. Thus, the P/S ratio and P/B ratio, which do not look at these decisive aspects (positive free cash flow, profit, etc.) are not relevant parameters for me.\nIn this respect, Palantir is a no-go for me. Losses have been piling up for the company in recent years. In 2018, for example, they were still (calculated backward) minus $0.35 per share. In 2020, the loss almost doubled to minus $0.65. Net loss was $580 million in 2018, $580 million in 2019, and $1.1 billion in 2020. So while losses remained stable in 2019, they almost doubled in 2020. This is not the development I want to see as a shareholder. In 2021, this development continues. The loss from operations in H1 2021 is already $260 million.\nStock-Based Compensation and Related Employer Payroll Taxes\nOf course, we all know what the problem is. Palantir is distributing a massive amount of its shares to its employees.\nWhile in H1 2020, \"only\" 181,955 shares were distributed, in H1 2021, distributed shares amounted to 426,473. So there seems to be no end to it. On the contrary, it is even accelerating. The influence on the profitability of this \"special factor\" is enormous. This is what profitability would look like if Palantir were to forgo its stock-based compensation.\n<img src=\"https://static.tigerbbs.com/805e55db5e25ceda47ecd13aa642636d\" tg-width=\"640\" tg-height=\"305\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\">\nSource: Investor relations, table by author\nPalantir would therefore be quite profitable without its unconventional stock-based compensation. This is, first of all, quite good news because it means that Palantir's business model itself is profitable. Profits would then also have risen much more strongly. The operating profit in H1 2021 would be $233 million and thus almost 20 times as much as in H1 2020 ($12.6 million). Excluding the stock-based compensation scheme, the gross margin would have been 81 percent in 2020, 10 percentage points higher than in 2019. And with that, we have jumped over a pretty big hurdle for sensible investment decisions: in the long run, only investments in profitable companies are profitable.\nDiscussing the Amazon factor\nMany Palantir bulls compare Palantir to Amazon(NASDAQ:AMZN). Amazon also took decades to become truly profitable. And it was the cloud business (also Palantir's business) that ignited Amazon's profit drive. Bears then argue that Amazon has put all its cash and profit into further growth to avoid paying taxes. At Palantir, however, stock-based compensation leads to the dilution of shares held by shareholders. In fact, the number of outstanding shares has increased massively. While they amounted to 1,726 billion in 2018, they now stand at 1,937 billion. This has an impact on the shareholders' profit. The impact was minus $0.33 in 2020 and minus $0.11 in H1 2021 per share.\nTherefore, we can conclude that stock-based compensation is directly detrimental to shareholders, while Amazon put cash into further growth, which conversely benefited shareholders. True, that is one side.\nThe other side goes like this. At that time, Amazon was primarily an online retailer. Amazon had to expand globally. It had to build fulfillment hubs, and it had to make locals, it had to implement legal teams all over the world, etc. It also had to sacrifice margins to be able to offer the best prices to customers everywhere. What does Palantir have? Yes, Palantir also has experts whoit sends out into the world:\n<blockquote>\n Our forward deployed engineers (“FDEs”) have travelled to bases in Afghanistan and factories in the industrial Midwest to deploy our platforms. Time in the field adds to the continuous improvement of our platforms. As FDEs help customers make the most of our software, they observe users’ challenges firsthand.\n</blockquote>\nBut already here, something becomes apparent. Palantir is a different company than Amazon was back then. Palantir's most important asset may be its employees. Conversely, this means that to invest in further growth, Palantir must invest in its most important assets. That costs money - just like at Amazon and it is likewise&nbsp;essential for further growth:\n<blockquote>\n We face intense competition for qualified personnel, especially engineering personnel, in major U.S. markets, where a large portion of our personnel are based, as well as in other non-U.S. markets where we expect to expand our non-U.S. operations. We incur costs related to attracting, relocating, and retaining qualified personnel in these highly competitive markets, including leasing real estate in prime areas in these locations.\n</blockquote>\n<blockquote>\n Further, many of the companies with which we compete for qualified personnel have greater resources than we have. If the perceived value of our equity awards declines, or if the mix of equity and cash compensation that we offer is less attractive than that of our competitors, it may adversely affect our ability to recruit and retain highly skilled personnel.\n</blockquote>\nAnd here we see what the crucial point for me is. Palantir's stock-based compensation is a commercial decision. It is not to harm shareholders. If it helps to accelerate the company's growth, then that's okay from my point of view. It is based on the same decision why Jeff Bezos never wanted to pay a dividend. Palantir can stop its compensation scheme to increase profitability. And then what? What do shareholders get out of it? The tax authorities might get something out of it, but not the shareholders.\nI, therefore, don't think that the stock-based compensation scheme is a bad thing. In addition, Palantir can also afford its stock-based compensation, as the balance sheet is excellent. The debt ratio, measured in terms of interest-bearing debt, is only 8 percent. The company is also sitting on $2.3 billion in cash and cash equivalents.\nOverall, the crucial thing for me is that the business becomes more profitable on the merits. And that is the case, as we have seen above. In particular, the twenty-fold increase in adjusted profit clearly shows that. In addition, Palantir is only in the process of scaling its software and cloud-based business. We can see how different Palantir is from other consultant companies when looking at Tetra Tech (TTEK). Tetra Tech is active in consulting and engineering services in the megatrends of water, environment, infrastructure, energy, and resource management. Here is what Tetra Tech does, taken from anotheranalysis on Seeking Alpha:\n<blockquote>\n Its GSG segment includes business with the U.S. government at the federal, state, and local levels. Likewise, all business with development agencies falls under the segment. In the last fiscal year, revenue in this segment was $1.78 billion, representing nearly 60 percent of the total revenue of $2.994 billion.\n</blockquote>\n<blockquote>\n Particularly important in the GSG segment, for example, is the analysis of water resources and environmental monitoring. Here, the company analyzes data and advises authorities or agencies on the proper management and allocation of resources.\n</blockquote>\n<blockquote>\n Another important business area is supporting government agencies in disaster management. Tetra Tech also provides indoor health services, including assessment and consulting for improvement to upgrade buildings.\n</blockquote>\n<blockquote>\n On the other hand, we have the CIG segment. Here, Tetra Tech bundles all activities with commercial customers, i.e., other companies or institutions that are not under government supervision and are not aid organizations. The spectrum is broad and includes energy utilities and customers in the industrial, manufacturing, and aerospace sectors. Significant markets for CIG's services include natural resources, energy, utilities, and civil infrastructure master planning and engineering for facilities, transportation, and local development projects.\n</blockquote>\nWell, if we look at what Palantir is doing, I see a lot of overlap with the Foundry and Gotham platforms. Only, Palantir seems to be able to do what Tetra Tech can do, only much more profitably. Tetra Tech, for example, is particularly proud of its use of technical and digital services such asTetra Tech Delta. Nevertheless, Tetra Tech's margins are in the single or low double digits. It is a consulting company, not a software company.\n<img src=\"https://static.tigerbbs.com/b594f3544687afdbd5f10d7624789f40\" tg-width=\"635\" tg-height=\"433\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\">Data by YChartsWhy the share price will explode once my investment thesis materialized\nAnd that, for me, is a crucial point and brings us to the disruptive element that also characterized Amazon in the early 2000s. If Palantir continues to deliver as it has recently with high growth rates, the share price will reflect such a development. It is, of course, a bet on high growth rates, on a disruptive business model. Microsoft has a market capitalization of $2 trillion, Amazon of $1.5 trillion. Palantir, on the other hand, is tiny at $40 billion. But assuming the operating margin rises to 25 percent, Palantir would have an adjusted P/E of 136 in 2022/2023. How much is that for a company that grows 20 to 30 percent per year?\nIn the long term, the share, therefore, offers enormous potential from my perspective. All Palantir has to do is deliver the performance that companies like Amazon have been delivering for decades (Amazon's average sales growth over the last ten years is 27 percent). However, all investors need to do is be aware that this is precisely the investment thesis. It's bold, but only a bold growth thesis can justify a price/sales ratio of just under 40, which brings us to the risks.\nRisks\nOf course, we also have to address the risks. My investments in Palantir are a bet that the company can scale its products around Foundry and Gotham (plus Apollo). It's the same bet Tesla (TSLA) investors made when the company was on the verge of bankruptcy amid Model 3 production problems. And, of course, the share is overpriced at the moment. Conversely, I spoke to a friend and said that I had bought after Q2 numbers. He said Palantir was a disappointing investment because it hadn't doubled since he got in, unlike other stocks or coins.\nIt is only an isolated case, but it shows that the market sentiment on Palantir is not so much bubble-shaped but that many market participants believe in the long-term effects. And the high valuation is accompanied by the risk of setbacks and sharp corrections. It cannot be ruled out that Palantir will suffer the same fate as many dot.com bubble stocks such as Microsoft (MSFT) or Cisco (CSCO). Palantir can grow, and the share price still falls.\nTo wrap things up - why I bought Palantir\nThe more I think about the company and the mindset of the CEO, the more I am convinced that we are going to witness something massive at Palantir. Palantir is not a bargain, however, but a bet. And that is why I take great care to protect my capital.\n<ul>\n <li>Due to the high valuation and the undeniable shareholder dilution, I am not highly bullish as both factors lead to significant risks.</li>\n <li>Therefore, I only invest in tranches. If it continues to go up, I am happy. If it crashes, I can buy more if the operating performance remains good. If not, I will find my fortune elsewhere.</li>\n <li>Overall, and in the long term (i.e., 20-year horizon), I see a great opportunity here. But that also means that I need patience and discipline to get through correction phases mentally.</li>\n</ul>","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's Share Price Will Explode When Taking The Amazon Factor Into Account</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\">\nPalantir's Share Price Will Explode When Taking The Amazon Factor Into Account\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-09-03 11:52 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4453145-palantirs-share-price-will-explode-when-taking-the-amazon-factor-into-account>seekingalpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nMany criticize Palantir for its stock-based compensation scheme. Bulls, conversely, often compare Palantir to Amazon.\nI belong to the bull camp. With the compensation scheme, Palantir is ...\n\n<a href=\"https://seekingalpha.com/article/4453145-palantirs-share-price-will-explode-when-taking-the-amazon-factor-into-account\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AMZN":"亚马逊","PLTR":"Palantir Technologies Inc."},"source_url":"https://seekingalpha.com/article/4453145-palantirs-share-price-will-explode-when-taking-the-amazon-factor-into-account","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1129167710","content_text":"Summary\n\nMany criticize Palantir for its stock-based compensation scheme. Bulls, conversely, often compare Palantir to Amazon.\nI belong to the bull camp. With the compensation scheme, Palantir is investing in its most important asset, its employees, and thus in further growth.\nI doubled my holding in Palantir after the 2Q figures. I expect the share price to explode as soon as the market recognizes the disruptive nature of Palantir's business.\nNevertheless, I am aware of the risks. Despite the good prospects, Palantir is not an all-in position.\n\nIntroduction\nDisclaimer beforehand: After announcing the 2Q figures, I doubled my holding in Palantir (PLTR). This makes Palantir the only company in my portfolio that does not generate a profit. My readers know that my basic approach to investing is relatively simple (simple is good). I invest in profitable companies that generate cash flow and either distribute it or use it to generate further growth. I made an exception to this rule with Palantir. And I feel pretty good about it.\nFrom my point of view, the company is a fascinating investment. The share is costly (it already was at the IPO), and the share price has already priced in an unquestionable success story. And yes, Alex Karp does crazy things. Palantir buys gold bars and allows payments in cryptocurrencies. Nevertheless, the Palantir share is an excellent investment opportunity for investors with a long-term investment horizon of 10 years or more and with the patience to endure tougher corrections. It is quite possible that in 10 or 20 years, we will look back with envy at today.\nPalantir is not profitable\nThe elephant in the room for me is the lack of profitability. As an investor, I want to invest in profitable companies. My investment shouldput food on my table. It should not burn money. Thus, the P/S ratio and P/B ratio, which do not look at these decisive aspects (positive free cash flow, profit, etc.) are not relevant parameters for me.\nIn this respect, Palantir is a no-go for me. Losses have been piling up for the company in recent years. In 2018, for example, they were still (calculated backward) minus $0.35 per share. In 2020, the loss almost doubled to minus $0.65. Net loss was $580 million in 2018, $580 million in 2019, and $1.1 billion in 2020. So while losses remained stable in 2019, they almost doubled in 2020. This is not the development I want to see as a shareholder. In 2021, this development continues. The loss from operations in H1 2021 is already $260 million.\nStock-Based Compensation and Related Employer Payroll Taxes\nOf course, we all know what the problem is. Palantir is distributing a massive amount of its shares to its employees.\nWhile in H1 2020, \"only\" 181,955 shares were distributed, in H1 2021, distributed shares amounted to 426,473. So there seems to be no end to it. On the contrary, it is even accelerating. The influence on the profitability of this \"special factor\" is enormous. This is what profitability would look like if Palantir were to forgo its stock-based compensation.\n\nSource: Investor relations, table by author\nPalantir would therefore be quite profitable without its unconventional stock-based compensation. This is, first of all, quite good news because it means that Palantir's business model itself is profitable. Profits would then also have risen much more strongly. The operating profit in H1 2021 would be $233 million and thus almost 20 times as much as in H1 2020 ($12.6 million). Excluding the stock-based compensation scheme, the gross margin would have been 81 percent in 2020, 10 percentage points higher than in 2019. And with that, we have jumped over a pretty big hurdle for sensible investment decisions: in the long run, only investments in profitable companies are profitable.\nDiscussing the Amazon factor\nMany Palantir bulls compare Palantir to Amazon(NASDAQ:AMZN). Amazon also took decades to become truly profitable. And it was the cloud business (also Palantir's business) that ignited Amazon's profit drive. Bears then argue that Amazon has put all its cash and profit into further growth to avoid paying taxes. At Palantir, however, stock-based compensation leads to the dilution of shares held by shareholders. In fact, the number of outstanding shares has increased massively. While they amounted to 1,726 billion in 2018, they now stand at 1,937 billion. This has an impact on the shareholders' profit. The impact was minus $0.33 in 2020 and minus $0.11 in H1 2021 per share.\nTherefore, we can conclude that stock-based compensation is directly detrimental to shareholders, while Amazon put cash into further growth, which conversely benefited shareholders. True, that is one side.\nThe other side goes like this. At that time, Amazon was primarily an online retailer. Amazon had to expand globally. It had to build fulfillment hubs, and it had to make locals, it had to implement legal teams all over the world, etc. It also had to sacrifice margins to be able to offer the best prices to customers everywhere. What does Palantir have? Yes, Palantir also has experts whoit sends out into the world:\n\n Our forward deployed engineers (“FDEs”) have travelled to bases in Afghanistan and factories in the industrial Midwest to deploy our platforms. Time in the field adds to the continuous improvement of our platforms. As FDEs help customers make the most of our software, they observe users’ challenges firsthand.\n\nBut already here, something becomes apparent. Palantir is a different company than Amazon was back then. Palantir's most important asset may be its employees. Conversely, this means that to invest in further growth, Palantir must invest in its most important assets. That costs money - just like at Amazon and it is likewise essential for further growth:\n\n We face intense competition for qualified personnel, especially engineering personnel, in major U.S. markets, where a large portion of our personnel are based, as well as in other non-U.S. markets where we expect to expand our non-U.S. operations. We incur costs related to attracting, relocating, and retaining qualified personnel in these highly competitive markets, including leasing real estate in prime areas in these locations.\n\n\n Further, many of the companies with which we compete for qualified personnel have greater resources than we have. If the perceived value of our equity awards declines, or if the mix of equity and cash compensation that we offer is less attractive than that of our competitors, it may adversely affect our ability to recruit and retain highly skilled personnel.\n\nAnd here we see what the crucial point for me is. Palantir's stock-based compensation is a commercial decision. It is not to harm shareholders. If it helps to accelerate the company's growth, then that's okay from my point of view. It is based on the same decision why Jeff Bezos never wanted to pay a dividend. Palantir can stop its compensation scheme to increase profitability. And then what? What do shareholders get out of it? The tax authorities might get something out of it, but not the shareholders.\nI, therefore, don't think that the stock-based compensation scheme is a bad thing. In addition, Palantir can also afford its stock-based compensation, as the balance sheet is excellent. The debt ratio, measured in terms of interest-bearing debt, is only 8 percent. The company is also sitting on $2.3 billion in cash and cash equivalents.\nOverall, the crucial thing for me is that the business becomes more profitable on the merits. And that is the case, as we have seen above. In particular, the twenty-fold increase in adjusted profit clearly shows that. In addition, Palantir is only in the process of scaling its software and cloud-based business. We can see how different Palantir is from other consultant companies when looking at Tetra Tech (TTEK). Tetra Tech is active in consulting and engineering services in the megatrends of water, environment, infrastructure, energy, and resource management. Here is what Tetra Tech does, taken from anotheranalysis on Seeking Alpha:\n\n Its GSG segment includes business with the U.S. government at the federal, state, and local levels. Likewise, all business with development agencies falls under the segment. In the last fiscal year, revenue in this segment was $1.78 billion, representing nearly 60 percent of the total revenue of $2.994 billion.\n\n\n Particularly important in the GSG segment, for example, is the analysis of water resources and environmental monitoring. Here, the company analyzes data and advises authorities or agencies on the proper management and allocation of resources.\n\n\n Another important business area is supporting government agencies in disaster management. Tetra Tech also provides indoor health services, including assessment and consulting for improvement to upgrade buildings.\n\n\n On the other hand, we have the CIG segment. Here, Tetra Tech bundles all activities with commercial customers, i.e., other companies or institutions that are not under government supervision and are not aid organizations. The spectrum is broad and includes energy utilities and customers in the industrial, manufacturing, and aerospace sectors. Significant markets for CIG's services include natural resources, energy, utilities, and civil infrastructure master planning and engineering for facilities, transportation, and local development projects.\n\nWell, if we look at what Palantir is doing, I see a lot of overlap with the Foundry and Gotham platforms. Only, Palantir seems to be able to do what Tetra Tech can do, only much more profitably. Tetra Tech, for example, is particularly proud of its use of technical and digital services such asTetra Tech Delta. Nevertheless, Tetra Tech's margins are in the single or low double digits. It is a consulting company, not a software company.\nData by YChartsWhy the share price will explode once my investment thesis materialized\nAnd that, for me, is a crucial point and brings us to the disruptive element that also characterized Amazon in the early 2000s. If Palantir continues to deliver as it has recently with high growth rates, the share price will reflect such a development. It is, of course, a bet on high growth rates, on a disruptive business model. Microsoft has a market capitalization of $2 trillion, Amazon of $1.5 trillion. Palantir, on the other hand, is tiny at $40 billion. But assuming the operating margin rises to 25 percent, Palantir would have an adjusted P/E of 136 in 2022/2023. How much is that for a company that grows 20 to 30 percent per year?\nIn the long term, the share, therefore, offers enormous potential from my perspective. All Palantir has to do is deliver the performance that companies like Amazon have been delivering for decades (Amazon's average sales growth over the last ten years is 27 percent). However, all investors need to do is be aware that this is precisely the investment thesis. It's bold, but only a bold growth thesis can justify a price/sales ratio of just under 40, which brings us to the risks.\nRisks\nOf course, we also have to address the risks. My investments in Palantir are a bet that the company can scale its products around Foundry and Gotham (plus Apollo). It's the same bet Tesla (TSLA) investors made when the company was on the verge of bankruptcy amid Model 3 production problems. And, of course, the share is overpriced at the moment. Conversely, I spoke to a friend and said that I had bought after Q2 numbers. He said Palantir was a disappointing investment because it hadn't doubled since he got in, unlike other stocks or coins.\nIt is only an isolated case, but it shows that the market sentiment on Palantir is not so much bubble-shaped but that many market participants believe in the long-term effects. And the high valuation is accompanied by the risk of setbacks and sharp corrections. It cannot be ruled out that Palantir will suffer the same fate as many dot.com bubble stocks such as Microsoft (MSFT) or Cisco (CSCO). Palantir can grow, and the share price still falls.\nTo wrap things up - why I bought Palantir\nThe more I think about the company and the mindset of the CEO, the more I am convinced that we are going to witness something massive at Palantir. Palantir is not a bargain, however, but a bet. And that is why I take great care to protect my capital.\n\nDue to the high valuation and the undeniable shareholder dilution, I am not highly bullish as both factors lead to significant risks.\nTherefore, I only invest in tranches. If it continues to go up, I am happy. If it crashes, I can buy more if the operating performance remains good. If not, I will find my fortune elsewhere.\nOverall, and in the long term (i.e., 20-year horizon), I see a great opportunity here. But that also means that I need patience and discipline to get through correction phases mentally.","news_type":1},"isVote":1,"tweetType":1,"viewCount":335,"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":115,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/815339397"}