Palantir Technologies Stock Fair Value Calculation – Avoid Palantir Technologies Until Growth Rates Expand Due to High Costs
November 22, 2023
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Palantir Technologies ($NYSE:PLTR) is a software company that specializes in data analytics, providing solutions for various sectors such as finance, government, and defense. Despite its impressive technology, their stock is not a good investment. The company’s high costs make it difficult for them to expand their growth rates. This means that the stock is too expensive compared to its potential return. The company has had a number of successes that have helped to propel it to success, such as winning high-profile deals with the CIA and other government organizations.
However, these successes have come at a cost—Palantir’s costs are extremely high and have continually increased since its founding. Furthermore, the company has been slow to diversify its services, meaning that it is at risk of losing out on potential profits if its current markets become saturated. In conclusion, investing in Palantir Technologies is not a wise financial decision at this time. Until Palantir can show that it is capable of generating returns that justify its high costs, investors should avoid the company until growth rates expand.
Share Price
On Monday, PALANTIR TECHNOLOGIES stock opened at $20.6 and closed at $21.3, up by 4.1% from last closing price of 20.5. Despite this small rise, it is important to take into consideration the long-term implications of investing in a company with such high costs. The high costs associated with Palantir Technologies are primarily due to their heavy reliance on artificial intelligence and software development, which can be highly expensive.
Additionally, their data-driven product offerings come with an additional cost in the form of maintenance and support. As a result, it is important to take these factors into account when considering whether or not to invest in the company. Although the current stock prices are slightly up, the long-term implications of such an investment must be taken into consideration due to the high costs associated with the company. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Palantir Technologies. More…
| Total Revenues | Net Income | Net Margin |
| 2.13k | 147.31 | 6.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Palantir Technologies. More…
| Operations | Investing | Financing |
| 489.77 | -2.07k | 181.76 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Palantir Technologies. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 4.19k | 921.52 | 1.48 |
Key Ratios Snapshot
Some of the financial key ratios for Palantir Technologies are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 28.6% | – | 8.2% |
| FCF Margin | ROE | ROA |
| 22.3% | 3.5% | 2.6% |
Analysis – Palantir Technologies Stock Fair Value Calculation
At GoodWhale, we recently completed an analysis of the fundamentals of PALANTIR TECHNOLOGIES, and have come to the conclusion that its fair value is around $19.9. This number was calculated using our proprietary Valuation Line, a comprehensive model that takes into account a company’s current earnings, future growth prospects, and other key variables. At the moment, PALANTIR TECHNOLOGIES stock is traded at $21.3, which is slightly overvalued by 7.1%. Therefore, investors may want to consider exercising caution before buying this stock, as any market corrections could cause the price to fall significantly below the fair value. More…
Peers
There is a lot of competition between Palantir Technologies Inc and its competitors: Snowflake Inc, Splunk Inc, Alteryx Inc. All of these companies are fighting for a piece of the market share in the data analytics industry.
– Snowflake Inc ($NYSE:SNOW)
Snowflake is a cloud-based data warehousing company. Its market cap is 55.41B as of 2022 and its ROE is -8.11%. The company’s main products are data warehouses, data lakes, and data migration services. Snowflake has been growing rapidly since its inception in 2012, with a compound annual growth rate of 97%.
– Splunk Inc ($NASDAQ:SPLK)
Splunk Inc is a big data analytics company that help organizations to make data-driven decisions and optimize their operations. As of 2022, the company has a market capitalization of 12.39 billion dollars and a return on equity of 78.61%. Splunk’s main competitors are Hortonworks, Cloudera, and MapR.
– Alteryx Inc ($NYSE:AYX)
Alteryx, Inc. is a data science and analytics company that provides a platform for data preparation, predictive analytics, and spatial analysis. Alteryx has a market cap of 3.54B as of 2022 and a Return on Equity of -86.92%. The company’s platform enables its customers to analyze data from multiple sources, including Hadoop, cloud-based data warehouses, and relational databases. Alteryx also offers a variety of training and certification programs to help its customers become more proficient in data science and analytics.
Summary
Investing in Palantir Technologies can be a risk, as its stock price is high and its growth rates have yet to expand. Analysts advise to avoid investing in the company until its growth rates show an improvement. Nevertheless, the stock price did move up on the same day, suggesting investors have high expectations for the company’s future prospects. Further evaluation to assess the company’s revenue outlook, competitive landscape, and financial stability will be necessary for investors interested in taking a position.
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