Palantir stock analysis. PLTR stock.
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When Palantir reported earnings last month, the stock jumped over 20%. That rally continued and the stock is now up 129% year to date.

That means the company is now valued at 31 billion dollars. With 2.9 billion of cash and investments and zero long-term debt, the enterprise value is 28.2 billion.

Palantir’s rally can be explained by 3 main factors. Continuing top line growth, another quarter of profitability and excitement for its generative AI platform.

Revenue in Q1 increased 18% to 525 million taking the total over the last 12 months to 2 billion and net income was positive for the second quarter in a row.

But you can see that net income over the last 12 months is still negative at minus 250 million. With ¼ of all expenses being paid in stock-based compensation, the company does have positive free cash flow to the tune of 346 million.

Growth at Palantir is still impressive with average revenue growth of 37% over the last few years and the company appears to be winning new contracts with governments on a regular basis.

However, the revenue growth rate does seem to be declining and this is still an expensive stock trading at 14 times revenue and almost 82 times free cash flow. In addition, stock-based compensation remains significant. Back in December 2020, there were 1.8 billion shares outstanding, at the end of March 2023, that number has risen above 2.1 billion.

A short sellers report last week claimed that Palantir is more of a consulting firm than a software company. It claimed Palantir invested in a number of SPACs on the basis that they would then purchase Palantir’s software.

It seems that Palantir offers founders generous exit strategies so it can acquire companies and convert them to Palantir’s products.

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