Palantir Technologies Inc.
PLTR Details
Palantir Technologies Inc (NYSE: PLTR) develops software that allows organisations to integrate large amounts of data, decisions, and procedures. The business is divided into two segments: commercial and government. The Commercial division serves customers in non-government industries. Both federal and non-federal government agencies in the United States are customers in the Government segment.
Latest News:
- Recent Commercial Contract: On May 4, 2022, The Department of Health and Human Services (HHS) selected PLTR for a 5-year "Solutioning with Holistic Analytics Restructured for the Enterprise Blanket Purchase Agreement. . The Palantir platform will be available to HHS officials throughout the department's many agencies and missions thanks to this USD 90 million BPA. Palantir's built-in data security features, innovative technologies, and common security architecture were deemed well-suited to meet crucial technology demands throughout HHS.
- Palantir and Trafigura Collaboration: On May 24, 2022, Trafigura Pte Ltd one of the world’s largest physical commodity trading companies, and Palantir Technologies Inc. today announced the development of a technology services platform for carbon emissions calculation, reporting and collaboration across commodity supply chains. This project marks the first time Palantir will go to market with a partner on carbon emissions tracking.
Q1FY22 Results:
- Solid Topline Performance: The company reported revenue growth of 31% on YoY to USD 446 million, driven by 54% surge in the commercial revenue, and 16% surge in government revenue.
- Decrease in Net Losses: PLTR witnessed and decline in net losses to USD 101.38 million in Q1FY22 vs. USD 123.47 million in Q1FY21, driven by solid jump in revenue.
- Healthy Balance Sheet: As of March 31, 2022, the company had a cash balance of USD 2.33 billion with no outstanding debt.
Key Risk:
The company is exposed to weakness in the broader economic activities, a big economic slowdown could hurt government and commercial spending. Also, from the technical standpoint, PLTR’s stocks is hovering in a long-term bearish zone, as it traded below its crucial long-term as well as short-term support levels, recovery in the stock could be little slow, if weakness in broader markets continues.
Outlook:
Guidance (Earnings Presentation: Q1FY22, May 09, 2022)
Valuation Methodology: EV/Sales Multiple Based Relative Valuation
(Analysis by Kalkine Group)
* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation:
PLTR’s stock got hammered to an all-time low of USD 6.44 recently following its first quarter 2022 earnings announcement. However, this implies that many positive developments got overlooked. The company is one of the top companies within the industry it operates and offers excellent growth prospects with substantial profitability potential. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 9.91.
We continue to believe that the market currently underestimates Palantir’s ability to expand its business in the following quarters, which is why it’s key reasons why its stock had free fall recently. We continue to believe that Palantir has a bright future.
Considering the significant correction in the stock price, debt-free balance sheet, strong liquidity, recent commercial contract, current valuation, and associated risks. We recommend a "Speculative Buy" rating on the stock at the closing price of USD 7.54, down 5.8% as of May 24, 2022, at 09:40 AM PDT.
1-Year Technical Price Chart (as on May 24, 2022, at 09:40 AM PDT). Source: REFINITIV, Analysis by Kalkine Group
Technical Analysis Summary:
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.
Note 3: The report publishing date is as per the Pacific Time Zone.
Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.
Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.
There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.
You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.
The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.
Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.
Please also read our Terms & Conditions and Financial Services Guide for further information.
On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website unless those persons comply with certain safeguards, procedures, and disclosures.
Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.