Palantir Needs A Catalyst_老虎社区_美港股上老虎

Palantir Needs A Catalyst

Seeking Alpha2021-10-22

Summary Palantir stock has delivered impressive gains since its IPO. However, it has consistently faced criticism that it is too reliant on government revenue. Lately we've been seeing some changes ...

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alexsander
·2021-10-23
thanks for the insight
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Frosty4ever
·2021-10-23
Being reliant on government contracts isn't bad. They're unlikely to default on payments.
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maOQiu
·2021-10-23
To the moon
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- maOQiu:
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  2021-10-23
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relaxlah
·2021-10-22
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- relaxlah:
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  2021-10-22
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PengsieX
·2021-10-22
Just buy and hold
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}\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 Needs A Catalyst\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-10-22 15:01 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4461289-palantir-stock-needs-a-catalyst><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nPalantir stock has delivered impressive gains since its IPO.\nHowever, it has consistently faced criticism that it is too reliant on government revenue.\nLately we've been seeing some changes ...</p>\n\n<a href=\"https://seekingalpha.com/article/4461289-palantir-stock-needs-a-catalyst\">网页链接</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"PLTR","symbol_name":"Palantir Technologies Inc.","start_time":0,"source_url":"https://seekingalpha.com/article/4461289-palantir-stock-needs-a-catalyst","article_id":"1105545224","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1105545224","pubTimestamp":1634886081,"sourceInfo":null,"weMediaInfo":null,"summary":"Summary\n\nPalantir stock has delivered impressive gains since its IPO.\nHowever, it has consistently f","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"PLTR":"Palantir Technologies Inc."},"translate_title":"Palantir需要催化剂","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PLTR":0.9},"content_text":"Summary\n\nPalantir stock has delivered impressive gains since its IPO.\nHowever, it has consistently faced criticism that it is too reliant on government revenue.\nLately we've been seeing some changes in that regard. For example, the company's big 'Foundry for Builders' push.\nIn this article I will develop a neutral thesis on Palantir, arguing that it will likely trade in the same range that it has been recently absent a big catalyst.\n\nScott Olson/Getty Images News\nPalantir(PLTR) is a stock that needs a catalyst. Its shares quickly surged from $9 to $35 after its IPO. Then they slid down to $20 just as quickly. After hitting that level, they spent many months bouncing around from $20 to $27. PLTR remains in that range to this day, trading for $24.90 as of this writing.\nIt looks like investors are waiting for a catalyst from Palantir. In the past few weeks, a few potential ones have emerged. An $800 million contract with the Army and a smaller $90 million one with Veteran’s affairs were enough to get some PLTR fans on Twitter(TWTR) excited. But none of it was enough to get PLTR out of the established range it had been trading in.\nOne possible reason for the sideways price action is uncertainty. Palantir is, famously, a stock caught between growth and dilution. On the one hand,it’s growing at 49%; on the other, its share count has doubled from 905 million (Q3 2020) to 1.8 billion (most recent quarter). It seems like investors aren’t sure what to make of this. Or, perhaps more likely, investors remain bullish but their buys are being overpowered by the effect of employees flooding the market with new shares.\nWhatever the case may be, Palantir stock is in the midst of a tug of war. It needs growth to outpace dilution before it can really start rising again.\nOne catalyst that would help PLTR achieve this is growth in its commercial segment. The company has long faced criticism that it is too dependent on government contracts. The federal government makes up two thirds of Palantir’s business, but only one third of U.S. GDP. It would appear then that there is a much larger TAM in commercial contracting than in government.\nTo date, the government has not only been Palantir’s biggest segment, but its biggest growth engine. In the most recent quarter, government revenue surged 66% while commercial grew by only 28%. U.S. commercial was a bright spot, outpacing the government with an astounding 90% growth rate. The strength in U.S. commercial revenue was impressive, no doubt. Nevertheless, I will develop a fundamentally neutral thesis in this article, arguing that Palantir needs a catalyst before it can return to its post-IPO bullishness.\nPalantir’s Accessible Market\nA big factor when looking at a stock like PLTR is its total addressable market (TAM). The company is not profitable in GAAP terms, so growth potential is the big metric investors are going to look at. We know that historical growth has been very strong. In the most recent quarter, for example, the company grew sales at 49%. That’s very impressive. But in order to know that that growth will continue, we will need to know the size of the market PLTR can reach.\nSo how big is Palantir’s TAM?\nAccording to the company itself, it is $119 billion annually. That breaks down to:\n\n$56 billion in the commercial sector.\n$26 billion in U.S. government.\n$37 billion in international government.\n\nSo we’ve got a sizable TAM here. And one that could grow over time. Most market experts believe that the big data platform industry is set to increase in size. According to Fortune Business Insights, the global big data market is set to grow at 14% CAGR to 2027. That’s heavy growth over a six-year period. And other research firms have made similar forecasts.Frost and Sullivan, for example, expects the market to be 4.5 times its 2019 size by 2025, a staggering 28% CAGR growth rate.\nSo Palantir has plenty of room to grow. In its most recent quarter, revenue was $376 million, a mere 0.315% of the TAM. If we annualize that $376 million, we get to $1.5 billion or 1.2% of the TAM. So there’s a lot of room for growth here. In the next section I’ll look at Palantir’s earnings to see how it’s growing in this fast growth industry.\nRecent Earnings\nPalantir’s most recent quarter showed stellar growth in most segments. The highlights were:\n\n$376 million in total revenue, up 49%.\n$232 million in government revenue, up 66%.\n$144 million in commercial revenue, up 28%.\n90% growth in U.S. commercial revenue (no dollar amount given).\n$200 million in free cash flow (up from $-433).\n$-0.07 in GAAP EPS.\n$0.04 in adjusted EPS.\n\nA pretty solid quarter all around. We’ve got overall revenue growth running at 49%, some segments growing at 90%, and even positive profits by some metrics.\nSo these are some pretty compelling quarterly results.\nUnfortunately, they are not enough to keep pace with Palantir’s considerable dilution. In its first quarter as a publicly traded company, Palantir had 905 million weighted average shares outstanding. By the most recent quarter, that figure had grown to 1.8 billion. That’s approximately 100% dilution in the span of four quarters. Primarily, the dilution has come from stock-based compensation. Palantir employees are paid in stock, and when they exercise their options, new shares hit the market and the float increases. This increases the supply of the stock and decreases its price--all other things the same.\nAccording to some sources, Palantir’s dilution is expected to slow down. For example, Michael Paige of Simply Wall Street expects dilution to slow to 4% a year. If his estimate is accurate then Palantir’s growth should run ahead of its dilution. The company is growing at 49% already and with it only having reached 1% of the TAM, it could keep that growth rate up.\nStill, the 4% future dilution figure is just an estimate. It’s possible that stock-based compensation will continue at a frantic pace, leading to more shares hitting the market. Therefore, Palantir needs a catalyst to propel growth higher.\nFoundry for Builders\nOne possible catalyst that could drive Palantir’s growth higher is Foundry for Builders. It’s an initiative to sign up seed-stage startups as Foundry customers. Foundry is an established platform that lets customers take in, process, and visualize data. With it, data from multiple sources--including traditional computers as well as physical sensors - can be taken in and analyzed.\nFoundry is an enterprise product whose revenue scales up with the size of the company using it. Its pricing varies depending on various usage metrics that generally increase as the customer scales. For example, pricing increases with:\n\nMore server cores.\nMore employees trained, etc.\n\nAll of these metrics tend to increase as a company grows in size. So, by signing up early stage startups as customers, Palantir can grow organically with them as they scale.\nThis idea helps address the problem of competition. In the commercial segment, Palantir faces stiff competition from other data platform companies. For example Splunk(SPLK),Verint(VRNT) and Mu Sigma. These companies already have a huge number of established companies as clients. Verint, for example, works with 85% of the Fortune 100. It is possible that Palantir could get those 85 giants to use Foundry in addition to Verint--after all, Palantir is “all purpose” data analytics while Verint specifically focuses on customer engagement.\nBut still, signing up big companies as clients when they already have data platform providers is going to be challenging. So, Palantir is signing up seed-stage startups through Foundry for Builders, and watching revenue grow along with them. This not only sidesteps the marketing challenge of getting big companies with established data platforms to switch, it also provides the possibility of revenue growth without additional marketing spend. So, it’s a rather ingenious idea.\nPossible Future Scenarios\nIf we look at the potential for Foundry revenue to scale with the size of the client, we can see that there’s potential for considerable growth. As mentioned previously, various aspects of Foundry increase in price as the client grows. To use one quick example: employee training costs $2,000 per employee. To assess how PLTR’s revenue would scale as a client grew, we could consider a scenario where a company grows from 1 employee to 10,000.\n\n1: $2,000\n100: $200,000\n1,000: $2 million\n10,000: $20 million.\n\nSo if a Palantir customer has 10,000 employees trained on Foundry, that’s $20 million in new revenue to Palantir. With 10 companies at that level, that’s $200 million. So there is a lot of potential revenue from having a small company sign up for Foundry and then grow. Of course, this would take some time to pay off. 10,000 employees is a large company: a seed-stage startup will not get there overnight. But it could get there eventually, and if it sticks with Palantir for its entire journey, it will generate a lot of revenue.\nRisks and Challenges\nAs we’ve seen in this article, Palantir is a high growth company with a lot of potential. Nevertheless, I have chosen to avoid the stock, and my thesis on it is fundamentally neutral. The following risks and challenges illustrate why I remain neutral despite this company’s obvious potential.\n\nDilution continuing.Palantir’s dilution of 100% over the last four quarters exceeded the company’s revenue growth (49% in the most recent quarter). We have some analysts expecting the dilution to ease off to 4%, but that’s no guarantee. Palantir’s dilution mostly comes from stock based compensation. If it wants to ease off with the SBC, then it will have to pay its employees more cash, harming its cash position. So this isn’t an easily fixed issue.\nProfitability issues.Palantir has never been profitable in GAAP terms in its 18 years of existence. That’s a long time to go without turning a profit. Sure, Palantir is investing heavily in growth. But after 18 years, you would expect at least the occasional profitable quarter. Arguably, Palantir is profitable by some non-GAAP metrics like adjusted EPS and free cash flow. But note the previous point: if Palantir wants to cut back on dilution it will have to pay more salary in cash, and free cash flow will be put under pressure.\nFoundry for Builders failing.Foundry for Builders is a pretty brilliant idea. By signing up clients when they’re small, Palantir gains the potential to grow without additional marketing spend. The problem is that if this initiative doesn’t succeed, then commercial growth is going to have to come from courting big companies. That’s a challenge because many of those companies have data platforms already, and PLTR will have to convince them to switch. That will be an expensive endeavor. Switching from one data provider to another costs real money (cancellation fees, replacing legacy systems, etc.), so the marketing effort to convince a company to do it will likely be expensive as well.\n\nThese are real risks for Palantir investors to keep in mind. Nevertheless, the point is undeniable: this is a very fast growing company that has barely begun to even scratch its TAM. The potential for high double-digit growth continuing for years is significant. So I would say that basically as long as the dilution slows down this stock has a good future ahead of it. For me, though, that’s not something I’m willing to bet on.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":858919458,"gmtCreate":1634961720856,"gmtModify":1634961721416,"author":{"id":"4093485445879440","authorId":"4093485445879440","authorIdStr":"4093485445879440","name":"alexsander","avatar":"https://static.tigerbbs.com/74729d318355ddcc28103cafe6b6d677","vip":1,"crmLevel":3,"crmLevelSwitch":0,"idStr":"4093485445879440"},"htmlText":"thanks for the insight","listText":"thanks for the insight","text":"thanks for the insight","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/858919458","repostId":1105545224,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"CN"},{"id":851445541,"gmtCreate":1634936645637,"gmtModify":1634950221713,"author":{"id":"3583106134648492","authorId":"3583106134648492","authorIdStr":"3583106134648492","name":"Frosty4ever","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":3,"crmLevelSwitch":0,"idStr":"3583106134648492"},"htmlText":"Being reliant on government contracts isn't bad. They're unlikely to default on payments.","listText":"Being reliant on government contracts isn't bad. They're unlikely to default on payments.","text":"Being reliant on government contracts isn't bad. They're unlikely to default on payments.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/851445541","repostId":1105545224,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"CN"},{"id":851452782,"gmtCreate":1634929655680,"gmtModify":1634929655970,"author":{"id":"3553680669291881","authorId":"3553680669291881","authorIdStr":"3553680669291881","name":"maOQiu","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"3553680669291881"},"htmlText":"To the moon","listText":"To the moon","text":"To the moon","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://laohu8.com/post/851452782","repostId":1105545224,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":6292965,"gmtCreate":1634929664232,"gmtModify":1634929664326,"authorId":3553680669291881,"author":{"id":3553680669291881,"authorId":3553680669291881,"name":"maOQiu","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":6,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":851452782,"type":1,"supId":0,"prevId":0,"content":"[财迷]","text":"[财迷]","html":"[财迷]"}],"langContent":"CN"},{"id":851521297,"gmtCreate":1634915524761,"gmtModify":1634915540725,"author":{"id":"4093051399756810","authorId":"4093051399756810","authorIdStr":"4093051399756810","name":"relaxlah","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"4093051399756810"},"htmlText":"like","listText":"like","text":"like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":1,"repostSize":0,"link":"https://laohu8.com/post/851521297","repostId":1105545224,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":6291535,"gmtCreate":1634915532951,"gmtModify":1634915533033,"authorId":4093051399756810,"author":{"id":4093051399756810,"authorId":4093051399756810,"name":"relaxlah","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":851521297,"type":1,"supId":0,"prevId":0,"content":"like","text":"like","html":"like"}],"langContent":"CN"},{"id":851828753,"gmtCreate":1634893901563,"gmtModify":1634896174526,"author":{"id":"3578047933589423","authorId":"3578047933589423","authorIdStr":"3578047933589423","name":"PengsieX","avatar":"https://static.tigerbbs.com/ebe92821eba3b91a6431d698b66bbed5","vip":1,"hat":"https://static.tigerbbs.com/f84859c65fc2d7681e28f6b8e9b0535a","crmLevel":3,"crmLevelSwitch":0,"idStr":"3578047933589423"},"htmlText":"Just buy and hold","listText":"Just buy and hold","text":"Just buy and hold","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/851828753","repostId":1105545224,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"CN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":31,"commentSize":5,"repostSize":0,"favoriteSize":2,"likeStatus":false,"favoriteStatus":false}}