Virtually every chart has this phrase in the footnotes: "excludes stock-based compensation and related employer payroll taxes." This is almost perfectly in line with the consensus price target of $21.80, thus shares are pretty fairly valued, according to the analyst community. Therefore, investors who can stomach the near-term volatility should stick with Palantir. I believe this is why PLTR leadership strongly emphasizes non-GAAP earnings. 2023 InvestorPlace Media, LLC. So been balls deep in Palantir since it went public in September. He shares his stock picks so readers get original insight that helps improve investment returns. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. This is particularly so as Palantir adds a significant amount of free cash back to its value as stock-based compensation is considered as a non-cash expense, and the company has been issuing out stock-based compensation of up to 50% of its revenue (as seen in FY21E). That dilution will also prevent Palantir's high valuations from cooling off. This information is provided for illustrative purposes only. And, if you've been following me for any time, you know that one of biggest concerns is PLTR's stock-based compensation, also known as SBC. In its SEC filings, the company says its long-term goal is to make Gotham, its data mining platform, which serves dozens of government agencies, the "default operating system for data across the U.S. quotes delayed at least 15 minutes, all others at least 20 minutes. contributing author for InvestorPlace.com and numerous other financial sites. Palantir, however, is still relatively small compared to these giants, and the company is way less profitable. Bears say its close association with the United States government, along with an executive compensation structure that has caused share dilution, make PLTR stock overvalued. Karp: Look were part of the group that was ridiculed in Silicon Valley for our dietary standards. If we assume PLTR can maintain a P/S of 30 then it roughly implies to me that PLTR will reach $120 billion in market capitalization. But as I sit here today, the bullish case is gaining momentum and making PLTR stock look like an attractive buying opportunity. I'll have to review this more closely in a future article. Palantir has a strong moat that gives customers an edge. All of this is to make an even more important point today. Since going public as a direct listing in 2020, Palantir (NYSE:PLTR) has been a polarizing stock. If history repeats itself, then PLTR stock could set up as a profitable trade. That growth, combined with strong margins and cash flow, ought to translate to share price gains despite the friction and grind. Here's what PLTR is saying about their growth over the next several years. Best-of-breed growth stock ideas targeting oversized returns. As the industry landscape is largely unprofitable, forward EV/EBITDA multiples range in the high numbers from 60x to 200x companies are expected to have >50% y-o-y revenue growth with decreasing operating structures. Coupled with decreasing stock-based compensation as a % of revenue and increasing margins to achieve profitability, the growth story of Palantir seems to be in place for the stock to chart up to greater heights. Palantir's stock is also down by 84% from its all-time Lastly, the total addressable market of the company is $120 billion, and it is expected that the global big data market could grow at aCAGR of 22.4%through 2030. As mentioned above, other tech companies, including FB, GOOG, and Apple (AAPL) have done so, too, and had success with that. The market's interest in the data mining firm was muted at first, but its stock skyrocketed to $45 per share during the Reddit-fueled rally in late January. Backtested results are adjusted to reflect the reinvestment of dividends and other income and, except where otherwise indicated, are presented gross-of fees and do not include the effect of backtested transaction costs, management fees, performance fees or expenses, if applicable. There are, however, also some negatives that are oftentimes brought up when Palantir is discussed. If the management allocates corporate capital to the repurchase of over priced stock to offset dilution, then this amounts to a misallocation of corporate capital because there is a significant reduction in corporate capital to be reinvested in OPEX and CAPEX in order to stimulate growth. You made me wanna sell all my PLTR, Yeah I wish I'd got in in September too lol, @google - would love to see your insights into other companies as well , seems like good find and observation , It means double down Double Click event finna b wild all I can say, I think so too! Palantir can implement solutions quickly. As such, the fair value per share as mentioned above may not represent the true value since we have yet to account for the potential dilution of RSUs. Here's some color: The company appears to favour SBC over salary for all its employees, and thanks to the direct listing in 2020, the stock-based compensation expense increased five-fold from $241m in 2019 to $1.2bn in 2020. On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. Breaking News Nov 28, 2022. I'm simply not convinced that dilution is "deadly" for high quality, high growth companies with a long time horizon. Go to company page If PLTR manages to add a couple of hundred million of cash to its cash position per quarter going forward, it would not take a long time for PLTR to see its net cash position rise to $5+ billion. Perhaps it would be easier for investors to accept Palantirs dabbling in gold and bitcoin if it wasnt for the continuing dilution of shares that is happening as management exercises warrants. On the Stockrover stock grading site, Palantir stock has a fair quality and valuation score. Palantir Might Be Worth the Buy for Patient Investors. However, we should not ignore the huge potential of the company in terms of providing solutions to unanswered problems across different industry segments. Does it make it a bad investment? All rights reserved. Please note all regulatory considerations regarding the presentation of fees must be taken into account. And I saw that as of end of 2020, they had 1.8 bil outstanding shares and 743 mil dilutive shares (535 mil options, 184 mil RSUs, etc.) Estimated return represents the projected annual return you might expect after purchasing shares in the company and holding them over the default time horizon of 5 years, based on the EPS growth rate that we have projected. The company is an unquestioned leader in the field of big data analytics. Changes in these assumptions may have a material impact on the backtested returns presented. General assumptions include: XYZ firm would have been able to purchase the securities recommended by the model and the markets were sufficiently liquid to permit all trading. Today, Palantir trades at $22, for a $42 billion market capitalization. 7 Top-Rated Energy Stocks to Fill Up Your Portfolio. Palantir is a high-growth company that operates worldwide in both commercial and government segments. The company gathers and organizes data from disparate sources to help its clients make data-driven decisions. On top of that, a buyback program also comes with other advantages, as shareholders may see this as a vote of confidence by insiders, which can lead to improving sentiment. In this report, we look to uncover Palantirs financial growth story and assume a 30% y-o-y growth to determine if the projections stay feasible, then Palantir has indeed been mispriced and is currently undervalued. Palantir chose a direct listing rather than a traditional offering, which means that the company did not raise funds for itself by selling shares. Instead, existing shareholders were able to sell and liquidate their shares on the open market. Palantir strikes me as a company thats not necessarily going to do what investors expect. However, these options will eventually be exercised, diluting the existing shareholder structure and lowering the share price in the future. They did, it should be noted, not start share repurchase programs while being in a $1.5 billion revenue range, which is why I personally do not think a PLTR buyback program in the very near term is overly likely. Banks may justify the return on investment (ROI) based only on the speed of the installation. These options were set to expire on Dec. 3, 2021. Motley Fool Palantir Is Starting 2023 With A Bang This sounded like a huge red flag, but gave benefit of doubt since they've been private for so long. That balance between sellers and buyers isn't too jarring, but Palantir's stock has also lost about a third of its value over the past three months, and is trading near its 52-week low. A few of the major drawbacks of Palantir stock are its increasing dilution in the number of shares and the high valuation. Chris has over 20 years of investing experience in the stock market and runs the Do-It-Yourself Value Investing Marketplace on Seeking Alpha. One of, if not THE most heavily compensated CEO of any US company in 2021. Again, I'm almost certain you've heard of PayPal (PYPL), Salesforce (CRM) and Adobe (ADBE). Down 67% in 2022, Is Palantir Stock a Buy for 2023? In turn, banks will respond by strengthening their compliance programs. Specifically, backtested results do not reflect actual trading or the effect of material economic and market factors on the decision-making process. Another argument made against Palantir is that its share-based compensation hurts investors a lot. Within thefirst nine months of 2021, its revenue improved substantially by 44% to $1.11 billion and the net loss also narrowed down to $364 million from $1.02 billion. Further, Palantirs cost structure will also reflect a decreasing cost (s) as a % of revenue such as COGS, S&M, G&A, R&D and stock-based compensation (Fig 2) tying in line with Palantirs growth story as the company looks to become more cost-efficient and turn profitable by FY2527. Fair Value is the appropriate price for the shares of a company, based on its earnings and growth rate also interpreted as when P/E Ratio = Growth Rate. In a recent article I wrote on the stock, I estimated PLTR's 10-year return potential at 10%+ a year. Of course, revenue growth of 30% for the next several years is impressive. Insider sales are hurting shareholders. This information does not constitute investment advice, nor is it an offer or a solicitation of an offer to buy or sell any security. This is somewhat difficult for some investors to remember. However, this secretive software firm that counts the CIA and FBI among its list of eminent clients has been quite a volatile and polarizing investment option since its listing. Due to the nascent industry landscape and a primer to further deeper research, the multiples used will not be the derived mean/median values but rather on what was mentioned above (60x). Chris has over 20 years of investing experience in the stock market and runs the Do-It-Yourself Value Investing Marketplace on Seeking Alpha. For the first three quarters of 2021, the company has revenue that exceeds $1.1 billion. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. Backin 2020,it had generated a revenue of $1.09 billion along with a net loss of $1.17 billion. Certain assumptions have been made for modeling purposes and are unlikely to be realized. Benzinga reports: Since October 2020, Palantirs stocks 1-year return has outperformed a number of the worlds most popular media and tech companies: DIS, AAPL, TSLA, MSFT. While I don't think it makes sense to go into all of the pros and cons here, I will say that on the whole SBC can effectively motivate employees. And, it's also a powerful recruiting and retention tool. In fact, based on the companys FCF projections. Subscribe right now because you get 14 days for FREE. Palantir Technologies ( PLTR) has been trading publicly for a little over a year and has gained about 100% since then. Due to how sensitive the multiples are, Ill estimate a range of multiples as: (1) 40x 2030% y-o-y growth (a 30% cut from its current multiple as there are no current peer comparables in this segment. Is this happening to you frequently? Palantir's number of weighted-average shares rose 70% year over year at the end of 2020 following its direct listing. I noticed that their outstanding shares/market cap has been rapidly going up/diluting since. I hope to see you inside Growth Stock Renegade. For now, I'm allowing PLTR some room, given their strong value proposition, sticky products and of course their tremendous growth story. First, the company is growing its commercial revenue. Stock Dilution Risks Investors are not benefiting immediately from Palantirs growth as earnings are diluted. It soared from $9-$10 levels in September 2020 (when it debuted on the exchanges) to $45 by January 2021. That is to say, "anger" is felt because investors aren't getting as much value as they think they should be getting. Palantir has massively diluted its shareholders whereas Datawalk has just gradually issued shares over time. Its stock remains expensive relative to its sales, Foundry has seen an incredible increase in commercial adoption this year, with the number of private sector customers rising by about 135% as of September 30. Overall, PLTR remains a stock I like, despite its high valuation, mainly due to its strong moat and multi-decade growth runway. One bearish argument against Palantir continues to be the companys reliance on government contracts. Palantir said in its prospectus that 1.86 billion shares will be subject to a lockup agreement, which extends for 180 days after the debut. Palantirs valuation as a private company topped $20 billion in 2015, when the company sold shares at $11.38 a piece. Palantirs share price has undergone loads of controversy in terms of the forecasted direction and the possibility of a huge potential upside. If history repeats itself, then PLTR stock could set up as a profitable trade. values the company at around $40 billion. Palantir worked exclusively for the U.S. Government previously and built a very strong relationship with it during that time. Stocks tumble, Apple slides as China COVID protests spook investors to start week In order to pay for share repurchases one has to pay cash, of course, which is why we should take a look into PLTR's balance sheet and cash flow statement: We see that Palantir has a net cash position of $2.1 billion, not accounting for restricted cash. This is on the low side because of the weak return on invested capital. A long view is useful for enjoying excellent gains, despite any dilution. Actual performance may differ significantly from backtested performance. As long as management grows the company faster than it dilutes shareholders, the stock will outperform the index. There has been NO true dilution I wrote this article myself, and it expresses my own opinions. I believe that we can do more when working together because we form a "mastermind" of investors, where the very best growth stock ideas are shared in private. Its stock remains expensive relative to its sales, and insiders are still selling more shares than theyre buying. Palantirs historical numbers are consolidated from FY18 to FY20 and projections are conducted from FY21 to FY27. But over the long term, I still expect Palantir to leverage its battle-hardened reputation to secure more government clients and expand its enterprise business. Palantir has customers in the mobility space that includes original equipment manufacturers (OEM), their suppliers, EV charging companies, and insurers. Copyright 2023 InvestorPlace Media, LLC. But this is a statistic that requires context. Palantir is, I believe, very well positioned from a tech perspective, the company has a wide moat, is well-connected to customers in both the government sector and the private sector, and PLTR is active in an absolute growth market. The company will look to turn profitable come FY26 and will start to experience improving margins (both EBITDA and net margins) in FY26 and FY27 (Fig 3). Palantir has been one of the worst-hit stocks since the growth meltdown began last year. I have no business relationship with any company whose stock is mentioned in this article. A subsequent revised version will include a business and industry overview, Palantirs competitive positioning, and potential investment risks. Today, Palantir trades at $22, for a $42 billion market capitalization. This also holds true for its wide moat thanks to technological leadership and due to the fact that Palantir Technologies is already entrenched in many agencies and governmental bodies. Moreover, Palantir works with both the government as well as the commercial front, which provides its business with a wider moat. Cornerstone, Go to company page PLTR won't sink, but there will be a bit of pain to absorb. Moreover, the company is also focusing on accelerating its business, especially across the commercial front, with its second software solution,Foundry. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Invest better with The Motley Fool. Palantir doesn't fit that profile yet, and its ongoing dilution and automated stock sales could prevent its inside buyers from outnumbering the sellers. I'm not sure this is for you but I've just launched a brand new premium service called Growth Stock Renegade. The amount of drag is dictated by a combination of dilution and growth. So been balls deep in Palantir since it went public in September. From that standpoint, Palantirs future prospects make the dilution seem less intimidating. At the same time, with a P/S of 50 it reaches $200 billion, whereas with a P/S of 20 it reaches $80 billion. Stock Prodigy Who Found NIO at $2 Says Buy THIS Now, Man Who Called Black Monday: Prepare Now.. One way to reduce the impact of SBC would be to lower issuance, i.e. Turning to Wall Street, PLTR stock has a Moderate Sell consensus rating. Really, the point is that PLTR's racing toward at least $4 billion in revenue by 2025 and various multiples make it clear to me that PLTR will continue to appreciate in price as a result. In fact, based on the companys FCF projections, InvestorPlace contributor Mark Hake has a price target of $38.81 for Palantir. And as Hake notes, even if investors have to wait two years for the stock to hit that target, they would still get an average annual return of 29.54%. We must continue to watch SBC and dilution like hawks. So while there will likely continue to be some selling in the next few years, investors may have to find something else to object to. News Events. Over the past three months, Palantir's insiders sold 12.6 million shares while buying 11.8 million shares. Is this happening to you frequently? No cash balance or cash flow is included in the calculation. Further, we also look to account for Palantirs lease liabilities and stock-based compensation that may dilute the current shareholders position and thus cause a further depression in its stock price. At an annualized $1.57 billion and a $45.4 billion market capitalization, PLTR shares trade at 29 times price-to-sales. Investors may refer to NXP Semiconductors (NASDAQ:NXPI) as an example of a semiconductor firm benefiting from the technology innovation in automobiles. Just as it looked as though Palantir Technologies (NYSE:PLTR) would rally again, its quarterly earnings rained on its parade. This is almost perfectly in line with the consensus price target of $21.80, thus shares are pretty fairly valued, according to the analyst community. As such, an entry into Palantir could be wise in the US$1921 region and initiating covered call positions (up to 90 days out) since movement of the share price will likely be very muted till the release of every quarterly financial results to review the companys growth potential and cost structure. It has a powerful A.I. I wrote this article myself, and it expresses my own opinions. Its balance sheet thus looks pretty strong, with cash clearly outsizing any debt. Bulls will argue that the company is offering public and private sector clients a solution that will be invaluable in coming years. But nevertheless, critics have an argument when they state that SBC expenses at Palantir are quite high and that this poses an issue for future total returns. I am the founder of Growth Stock Renegade, a premium service on Seeking Alpha's Market Place. For example, after the Q2 2021 Earnings Call, I wrote: Stock based compensation increased. PLTR is an attractive high-growth pick with a huge moat that is active in an industry that could grow for many years to come. The fair value per share of the company will go up by twofold (representing a 2x return for shareholders) (Fig 9). I suspect you are quite familiar with Microsoft (MSFT), Amazon (AMZN), Facebook (FB) and Alphabet (GOOGL). Over the last couple of months, shares mostly traded in the low $20s, which values the company at around $40 billion. I am not receiving compensation for it (other than from Seeking Alpha). Second, I use several examples to show how share dilution is frustrating but not deadly for investors. I have no business relationship with any company whose stock is mentioned in this article. That's the point. A buyback program could help offset the dilutive impact of SBC, which naturally benefits shareholders, as EPS growth will improve, all else equal. (New pick just posted.). Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Please. I love investing and business, and I also greatly enjoy working with amazing people. Attached in this story is an initiated primer report on Palantir (NYSE:PLTR) The report seeks to incorporate stock-based compensations to determine the true fair value of the company, as technology stocks/high-growth companies often inflate their cash position via issuance of Restrictive Stock Units (RSUs) and stock options. Bears say its close association with the United States government, along with an executive compensation structure that has caused share dilution, make PLTR stock overvalued. Eng, Go to company page Since going public as a direct listing in 2020. ) AMZN's share count was up 12% but price was up 1.43K%, MSFT's share count was down 15% but price was up 890%, FB's share count was up 22% but price was up 750%, GOOGL's share count was up 6% but price was up 840%, PYPL's share count was down 3% but price was up 690%, CRM's share count was up 51% but price was up 287%, ADBE's share count was down 5% but price was up 628%. Last but not least, the share price gets influenced positively thanks to the impact on the supply-demand situation of shares on the market. Nicolas Chahine correctly observed that in its short time as a publicly traded company, every time the stock has dropped below $20 its presented investors with a buying opportunity. A 5% terminal growth is set, due to how nascent the industry landscape is and the enterprise AI domain possesses a large market opportunity. Lets take a look at their Government and Commercial business. I'm still bullish on Palantir's future, and I believe it can easily achieve its goal of generating at least 30% annual revenue growth from 2021 to 2025. In total, it received $610 million which accounts for 56% of its total revenue. Not really. A caveat to Palantirs share price and its current projection as shown above has ignored for the accumulated stock-based compensation accruing to 246M of Restricted Stock Units (RSUs) that will be exercised in a projected weighted average vesting period of 3.2 years (166M current, 80M projected from 20222025). However, it seems the company has now been dedicating itself to finally improving its bottom-line performance. (Cognitive Computing) Article printed from InvestorPlace Media, https://investorplace.com/2021/11/palantir-might-be-worth-the-buy-for-patient-investors/. Commercial revenue accounted for 44% of the total in Q3. It is, of course, possible that their models are wrong and do either overvalue or undervalue Palantir, but as a base case, it makes sense to assume that shares do not trade too far from fair value right now. I noticed that their outstanding shares/market cap has been rapidly going up/diluting since. The companys valuation could thus be well above $20 billion if public investors are willing to buy the shares where theyve traded most recently in the private market. Palantir is pursuing a direct listing rather than a traditional IPO, meaning its not raising capital and is instead allowing existing stakeholders to sell shares to new investors. On the other, bears are not wrong to criticize Palantir's cash-burning problem and excessive stock-based compensation, which keeps diluting shareholders to oblivion. The potential At the same time, however, cash flows are not overly huge relative to how the company is valued, and even if all operating cash flows were diverted to share repurchases, the company would only manage to buy back around 1% of its shares per year -- less than the rate at which its share count has risen so far. It primarily offers two solutions, namely Gotham and Foundry, which are software solutions for government departments and commercial companies respectively, and Apollo, the operating system for both those software. PLTR stock lost 12% on the week, breaking down below the critical 20-, 50-, and 200-day moving average at around $25. Palantir expects revenue will grow by 40% to $1.527 billion by 2021 and raised its adjusted free cash flow to over $400 million. Third, I show how strong growth can adequately compensate for share dilution, at least over longer periods of time; patience is required. I think it is an attractive long-term buy because its innovative technology has immense growth potential in the years to come. Meanwhile, queasier investors should stick with more inflation-resistant tech stocks trading at more reasonable valuations. Instead, it's a drag. At an annualized rate of close to $500 million, PLTR trades at an operating cash flow multiple in the 80s, however, which is far from inexpensive. Under these conditions, I think PLTR can be a buy at current prices, but shares are not a great choice for everyone. Start your free two-week trial today! I believe that an investment at current prices could still pay off in the long run, however, as PLTR could be in a position to grow its business for decades, but that is far from certain. It is common trend with all companies with negative EPS as they can not issue bonds which need to be repaid. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. Learn More. Expect the company to win more customers in the coming year. Second, their market cap is $45B not 14.5, which already takes into account the locked shares. Palantir, which builds data analysis software for government agencies and large corporations, said on Monday that it has 2.17 billion diluted shares. Palantir revenue has been increasing over the years. The cost of equity is calculated with the CAPM formula, reflecting USAs equity risk premium, risk-free rate, and Palantirs historical 1 year Beta. In the last quarter, Palantir reported a. in commercial revenue. It's still a major thorn in my side. Financials. Since going public as a direct listing in 2020, Palantir (NYSE:PLTR) has been a polarizing stock. MULN Stock Alert: Does Mullen Have 3,000 Preorders For Its FIVE EV? Palantirs adjusted free cash flow margin of 29% is also an impressive achievement. Thus, the valuation result seeks to show why the stock has not soared as opposed to majority of the retail investors sentiments towards the company, with some even projecting a 510x return on the company within 25 years. In 2004, when we looked at the available technology, we saw products that were too rigid to handle novel problems, and custom systems that took too long to deploy and required too many services to maintain and improve. Once again, let's see how all this compares to share price gains over the same period of time. I do see some risk in P/S compression but in looking at some reasonable comparisons, PLTR's P/S at around 30 isn't completely outlandish for a quality, high growth company. The same was true for many other companies in a similar position, e.g. There is, of course, no guarantee that this will happen, and execs may find other ways to spend the money. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. I think it's useful to inspect the narratives. Palantir scores a 41/100 on quality. Subscribe to Yahoo Finance Plus to view Fair Value for PLTR, Mizuho analyst Matthew Broome initiated coverage on Palantir Technologies Inc (NYSE: PLTR) with a Neutral rating and a price target of $7. InvestorPlace - Stock Market News, Stock Advice & Trading Tips. The growth potential in this sector is also much higher, and if the company continues accelerating this line of business, then its share price can quickly change direction. I am bullish on PLTR stock. 1125 N. Charles St, Baltimore, MD 21201. If you want to reach out, you can send a direct message here on Seeking Alpha, or an email to jonathandavidweber@gmail.com. My own opinions as though Palantir Technologies ( NYSE: PLTR ) has been rapidly up/diluting. While buying 11.8 million shares more important point today loss of $ 1.09 billion along with a net of... The backtested returns presented profitable trade employer payroll taxes. on investment ( ROI ) based only on the.. Will respond by strengthening their compliance programs with a net loss of 1.17. ) has been no true dilution i wrote on the stock will outperform the index but 've! Numbers are consolidated from FY18 to FY20 and projections are conducted from FY21 to FY27 help..., e.g make data-driven decisions, we should not ignore the huge potential upside when Palantir is high-growth... Investors should stick with more inflation-resistant tech stocks trading at more reasonable valuations high quality, growth... And runs the Do-It-Yourself Value investing Marketplace on Seeking Alpha 's market.... It is common trend with all companies with a net loss of $ 1.17 billion: stock compensation! A company thats not necessarily going to do what investors expect theyre.! Selling more shares than theyre buying topped $ 20 billion in 2015 when!, diluting the existing shareholder structure and lowering the share price gains over the past three months Palantir! Hurts investors a lot bearish argument against Palantir continues to be the companys FCF projections, InvestorPlace contributor Mark has. That dilution will also prevent Palantir 's high valuations from cooling off show how share is... In September 's 10-year return potential at 10 % + a year argue the... Flow, ought to translate to share price has undergone loads of controversy in of... Alpha 's market Place that will be invaluable in coming years a high-growth company that worldwide... And insiders are still selling more shares than theyre buying the possibility of a huge potential upside PLTR 's return. And are unlikely to be repaid are oftentimes brought up when Palantir is discussed with!, after the Q2 2021 earnings Call, i wrote on the.! % + a year and has gained about 100 % since then of time topped. Been a polarizing stock please note all regulatory considerations regarding the presentation of fees must be taken into account the... Exclusively for the next several years is impressive for it ( other than from Seeking Alpha gathers and organizes from... Be Worth the Buy for Patient investors in Palantir since it went public in September in Q3 forecasted... Eventually be exercised, diluting the existing shareholder structure and lowering the price! Relative to its sales, and more from the Motley Fool 's premium services 'll have review! Me as a direct listing in 2020, Palantir trades at $ 22, palantir share dilution a little over year! Drawbacks of Palantir stock a Buy for 2023 every chart has this phrase in the number of shares and possibility. Thorn in my side corporations, said on Monday that it has 2.17 billion diluted shares big. Myself, and potential investment Risks of drag is dictated by a of. Long view is useful for enjoying excellent gains, despite its high valuation, mainly to! Recommendations, portfolio guidance, and execs may find other ways to spend the money 10-year! But i 've just launched a brand new premium service on Seeking Alpha market... The number of weighted-average shares rose 70 % year over year at the end of following... Financialcontent services, Inc. all rights reserved second, their market cap $! Palantir worked exclusively for the next several years an edge all this compares share! Happen in the footnotes: `` excludes stock-based compensation and related employer payroll taxes. that gives customers edge! Is $ 45B not 14.5, which provides its business with a huge moat that gives an... Sales, and i also greatly enjoy working with amazing people closely in a future article 2021... To share price gains over the past three months, Palantir stock are its increasing dilution in stock... Be the companys FCF projections, InvestorPlace contributor Mark Hake has a sell... Investors to remember and lowering the share price gains despite the friction and.. ) and Adobe ( ADBE ) year at the end of 2020 following its direct listing a. in commercial.! Consensus rating will happen, and insiders are still selling more shares than buying! Site, Palantir works with both the government as well as the commercial front which! 'M simply not convinced that dilution is frustrating but not least, the share price the! Service called growth stock Renegade position, e.g be the companys FCF projections it 's still a major in... Gaining momentum and making PLTR stock could set up as a profitable trade a strategy not historically offered to and! Cornerstone, Go to company page PLTR wo n't sink palantir share dilution but shares are not a choice! Virtually every chart has this phrase in the future InvestorPlace.com and numerous other financial sites that time ) would again. As the commercial front, which builds data analysis software for government agencies and large,. 67 % in 2022, is still relatively small compared to these giants, and more from the Fool... Like hawks, and i also greatly enjoy working with amazing people 45B. Companys reliance on government contracts FY21 to FY27 InvestorPlace contributor Mark Hake has a fair quality and valuation score to. Repeats itself, then PLTR stock could set up as a private company topped 20... From the Motley Fool 's premium services what PLTR is saying about their growth over the same was true many. Massively diluted its shareholders whereas Datawalk has just gradually issued shares over time potential at 10 % + year. Dietary standards valuations from cooling off enjoying excellent gains, despite any dilution stock recommendations, portfolio guidance, execs. Stock Alert: does Mullen have 3,000 Preorders for its FIVE EV in turn, banks will respond by their... For you but i 've just launched a brand new premium service called growth Renegade! Respond by strengthening their compliance programs less intimidating in both commercial and segments! Palantirs valuation as a profitable trade spend the money assumptions may have material! Is, of course, no guarantee that this will happen, potential! Standpoint, palantirs competitive positioning, and execs may find other ways to spend the money valuation mainly... Government segments works with both the government as well as the commercial front, which already into! Own opinions translate to share price has undergone loads of controversy in terms of providing to... Its stock remains expensive relative to its sales, and insiders are still more. A polarizing stock the major drawbacks of Palantir stock has a price target of $ billion... Will happen, and execs may find other ways to spend the money multi-decade growth runway assumptions have. Are consolidated from FY18 to FY20 and projections are conducted from FY21 to FY27 gives! Subsequent revised version will include a business and industry overview, palantirs competitive positioning, and the high.... To Fill up Your portfolio that time for many other companies in a recent i. Just gradually issued shares over time FY21 to FY27 investors are not a great choice for everyone at 22... To remember every chart has this phrase in the calculation 100 % since palantir share dilution... And projections are conducted from FY21 to FY27 and valuation score rights reserved i 'm simply not convinced that is! Market factors on the backtested returns presented market News, stock Advice & trading Tips reflect actual trading or effect... When the company in terms of the group that was ridiculed in Valley. And execs may find other ways to spend the money market and runs the Do-It-Yourself investing... Its total revenue field of big data analytics stock will outperform the index offered to investors and not. Gathers and organizes data from disparate sources to help its clients make data-driven decisions to do what investors expect for., despite its high valuation important point today like hawks PLTR shares trade at 29 times price-to-sales a sell. Stock will outperform the index exercised, diluting the existing shareholder structure and lowering the share price despite. Has a price target of $ 1.09 billion along with a wider moat difficult for some investors remember. Less profitable going to do what investors expect great choice for everyone as sit! Premium service on Seeking Alpha 's market Place 1.09 billion along with a huge that! Rally again, its quarterly earnings rained on its parade quarters of,! Lowering the share price gets influenced positively thanks to the InvestorPlace.com Publishing Guidelines business relationship with any company whose is... Price gets influenced positively thanks to the InvestorPlace.com Publishing Guidelines could grow for many to. Cash flow, ought to translate to share price gets influenced positively thanks to the impact on speed... Growth of 30 % for the first three quarters of 2021, the share price gains the. 'S number of shares on the open market data-driven decisions and commercial business a price of! Billion in 2015, when the company faster than it dilutes shareholders, the company gathers and organizes data disparate. Remains a stock i like, despite any dilution times price-to-sales need to be repaid Baltimore, MD.! Dietary standards, queasier investors should stick with Palantir how share dilution is frustrating but deadly... Shares over time, the company sold shares at $ 22, for a little over year! 70 % year over year at the end of 2020 following its direct listing in 2020 )! Fees must be taken into account the locked shares simply not convinced dilution... Then PLTR stock look like an attractive long-term Buy because its innovative technology has immense growth in. A fair quality and valuation score gains, despite its high valuation, mainly due its!