Palantir Technologies Inc.
PLTR Details
Palantir Technologies Inc. (NYSE: PLTR) offers solutions to help enterprises manage massive disparate data sets to obtain insight and deliver operational outcomes. Palantir Gotham (Gotham), Palantir Foundry (Foundry), and Palantir Apollo (Apollo) are its three leading software platforms. Its software is currently utilized in over 50 industries worldwide, and it has 237 clients as of December 31, 2021.
Latest News:
- New Partnerships: PLTR and Jacobs, an American technical professional services firm, announced a global strategic alliance on March 2, 2022, focusing on data and technology solutions for the infrastructure and national security markets.
- Strengthen the Fight Against COVID-19: On February 22, 2022, PLTR stated that the Centers for Disease Control and Prevention (CDC) had selected the company to expand its role as a trusted technology partner in the federal COVID-19 response by supporting required distribution and supply-chain operations.
FY21 Results:
- Growth in Topline: PLTR reported a 41.11% increase in revenues to USD 1.54 billion in FY21 (ended December 31, 2021) compared to USD 1.09 billion in FY20, due to a rise in the adoption of its products and services within the organizations.
- Decline in Losses: PLTR's net losses fell to USD 520.38 million in FY21, down from USD 1.17 billion in FY20.
- Robust Balance Sheet: As of December 31, 2021, the company's cash and cash equivalents totaled USD 2.52 billion, with no outstanding debt.
Key Risks:
- Customer Concentration Risk: In FY21 and FY20, the top three PLTR clients accounted for 18% and 25% of the company's sales, respectively. Its revenue may fall if it does not maintain or expand client connections or if significant consumers reduce their purchases.
Outlook:
- Q1FY22 Estimates: In the first quarter of the fiscal year 2022, PLTR anticipates revenues of around USD 443 million and an adjusted operating margin of approximately 23% as of February 17, 2022.
- FY22 Estimates: PLTR anticipates a 30% or higher yearly revenue increase through 2025. It also forecasts an adjusted operating margin of roughly 27%.
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 share price has surged 19.60% in the past month and is currently trading around the lower-band of the 52-week range of USD 9.74 to USD 29.29. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 15.00. The prospect of aggressive rate hikes is disappointing news for high-growth tech equities since it raises capital expenses and reduces the value of future earnings.
Considering the current trading levels, strategic partnerships, strong balance sheet, positive outlook, current valuation, and associated risks, we recommend a "Hold" rating on the stock at the closing price of USD 13.18, down 0.68% as of March 23, 2022.
Two-Year Technical Price Chart (as of March 23, 2022). Source: REFINITIV; Analysis by Kalkine Group
* The reference data in this report has been partly sourced from REFINITIV.
* All forecasted figures and industry information have been taken from REFINITIV.
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.