One of, if not THE most heavily compensated CEO of any US company in 2021. This suggests the stock has no near-term upside. 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. Palantir SBC is costly and is here to stay, therefore must be incorporated into a financial valuation. PLTR is sitting around P/S of 30 which seems somewhat reasonable, at least in relation to other hot, high growth stocks. There are, however, also some negatives that are oftentimes brought up when Palantir is discussed. Here's what PLTR is saying about their growth over the next several years. Palantirs share price has undergone loads of controversy in terms of the forecasted direction and the possibility of a huge potential upside. Copyright Palantir scores a 41/100 on quality. for Palantir. 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 other hand, CRM increased share count rather substantially and didn't quite make it over 300% price appreciation. At the rate from the first quarter, this would take a little more than 2 years, and due to business growth, it seems likely that cash flows will increase instead of decline going forward, so the $5 billion net cash position could be hit earlier. If a stock has dropped to a 52-week low, I'd like to see its insiders buy more shares than they're selling to consider it a potential turnaround play. 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. If other government agencies follow ICE's lead and adopt RAVEn or develop their own in-house data mining platforms, Palantir's government-facing business -- which already reported decelerating revenue growth over the past two quarters -- could face an unprecedented slowdown. As long as management grows the company faster than it dilutes shareholders, the stock will outperform the index. Hence, projecting such valuations does not seem realistic and the base cases outcome is recommended. Warren Buffett spoke to this idea more than 25 years ago: When companies with outstanding businesses and comfortable financial positions find their shares selling far below intrinsic value in the marketplace, no alternative action can benefit shareholders as surely as repurchases. So I Ultimately, I believe that the value of the shares is fairly priced (or even slightly overpriced) and the catalysts will definitely be reliant on (1) revenue growth, and (2) stock-based compensation payout as % of the companys cost structure. He shares his stock picks so readers get original insight that helps improve investment returns. And, the point is that an increase in share count is more like friction than a full stop. With the dilution effect accounted for (representing over US$3B in dilution across 246M shares), Palantirs true fair value per share will be priced at US$20.75 via EBITDA multiple method and US$20.18 via terminal growth method. We essentially have built a food ontology that provides nutrition in mission critical systems. Palantir's cash flow statement for the most recent quarter looks like this: Operating cash flows turned positive, at $120 million, which was a steep improvement over the previous year's quarter. Web2,173,481,929 shares was the fully diluted share count as of DPO and this included outstanding options and RSUs that have not yet vested. 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. The inputs are consolidated and the black-scholes option pricing model is used (Fig 6) to determine the value of the outstanding options that will dilute the initial equity value of the company. Both PYPL and ADBE were "cannibals" and appreciated over 600%. Chris has over 20 years of investing experience in the stock market and runs the Do-It-Yourself Value Investing Marketplace on Seeking Alpha. Most investors dont have major gainers like TSLA or NVDA on their radar from the start. Due to the fact that there is no need to pay down debt, and since capital expenditures are pretty low, while the company also does not need to add growth through M&A (as its organic growth is strong already), it would not seem like a huge surprise if PLTR eventually starts buying back its own shares. Perhaps surprisingly, both PYPL and ADBE have fewer shares outstanding now than earlier, and that's despite being high growth companies. Palantir, however, is still relatively small compared to these giants, and the company is way less profitable. 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. 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. reduce the number of new stock options that are awarded to execs and employees. Palantir has a strong moat that gives customers an edge. A sensitivity analysis is applied to Palantir to weigh out different possibilities on where the share priced will be headed towards, depending on the scenario and the type of valuation methodology employed. Backtested results are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Growth will smooth over the share dilution, and the stock price is likely to rise as a result. Is this happening to you frequently? Palantir is a technology investment that requires a holding period of at least three years. And the companys overall revenue was up 36% YOY at $392 million. 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. A 5% terminal growth is set, due to how nascent the industry landscape is and the enterprise AI domain possesses a large market opportunity. 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. Palantir had a share price of $30. Is this happening to you frequently? 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. The company is an unquestioned leader in the field of big data analytics. The DCF valuation employs the Free Cash Flow to the Firm (FCFF) methodology to arrive at the intrinsic value of the company. 1125 N. Charles St, Baltimore, MD 21201. Due to the fact that a high-growth company also has many other ways to invest its operating cash flows, apart from using them for buybacks, it seems likely that buybacks will not be a priority in 2021 and 2022, and possibly beyond that. Instead, it's a drag. Facebook (FB) or Alphabet (GOOG) (GOOGL) when they were smaller. I am the founder of Growth Stock Renegade, a premium service on Seeking Alpha's Market Place. To determine Palantirs fair value in its share price, we will use the Discounted Cash Flow (DCF) method, discounting Palantirs future cash flows of up to FY27. values the company at around $40 billion. The information set forth herein has been obtained or derived from sources generally available to the public and believed by the author(s) to be reliable, but the author(s) does not make any representation or warranty, express or implied, as to its accuracy or completeness. What did investors not like about Palantirs third-quarter results? Disclaimer: This initiated report is only a primer version it does not conduct a deep dive in the software-infrastructure technology market segment, but to incorporate managements overall guidance and analyse the companys operational structure to determine the fair value of the company. 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. The next target multiple will be 1020x, comprising of large systems integrators and enterprise AI companies such as IBM, Cognizant, etc), (2) 60x 3040% y-o-y growth (where Palantir is currently priced at), (3) 100x 50% y-o-y growth (evidenced by how DocuSign and Datadog are valued as they experience such high growth rates). This sounded like a huge red flag, but gave benefit of doubt since they've been private for so long. Thanks for pointing this out. The TipRanks Smart Score performance is based on backtested results. Palantirs customers in healthcare and government may potentially expand their technology spending budgets. Is This an Income Stream Which Induces Fear? Share dilution So according to their 10-k annual report, they have 1.792 billion outstanding shares and 743 million outstanding options (exercisable in the period of multiple years) as of end of 2020, of which 133 million of them will expire by end of 2022. It also announced it would accept payment in. 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. Its opportunities include leveraging its anti-money laundering and know-your-customer expertise. Quarterly Results SEC Filings / Governance. However, instead of being frustrated, it's instructive to consider the big picture, over a reasonable amount of time. 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. Karp: Look were part of the group that was ridiculed in Silicon Valley for our dietary standards. I'll Avoid These Sectors In 2023 3:39AM ET 1/15/2023 Seeking Alpha. In turn, banks will respond by strengthening their compliance programs. No representations and warranties are made as to the reasonableness of the assumptions. Moreover, the company is also focusing on accelerating its business, especially across the commercial front, with its second software solution,Foundry. Subscribe right now because you get 14 days for FREE. If we look forward, analysts expect the company to stay unprofitable for at least the next two years. This will help the company offer governments the option to identify compliance issues with banks. Since trades have not actually been executed, results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity, and may not reflect the impact that certain economic or market factors may have had on the decision-making process. Palantir Investor Relations. Second, it's bad but not super bad for PLTR. The profusion of opinions on social media and financial blogs makes it impossible to distinguish between real growth potential and pure hype. Stock Prodigy Who Found NIO at $2 Says Buy THIS Now, Man Who Called Black Monday: Prepare Now.. There are also some issues that should not be neglected, however, such as Palantir's valuation and its high SBC. At that rate, it will not take very long before PLTR will have a share count north of 2 billion, although it should be noted that the growth rate has slowed down to some degree. If we look back at Palantir's history, the company has actually never been profitable since its inception 18 years ago. Again, I'm almost certain you've heard of PayPal (PYPL), Salesforce (CRM) and Adobe (ADBE). Commercial revenue accounted for 44% of the total in Q3. 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. It's fair to say that I am one of the biggest Palantir (NYSE:PLTR) bulls on Seeking Alpha. This is somewhat difficult for some investors to remember. 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. Eng, Go to company page 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.) On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. Nevertheless, 287% is still quite robust. 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. That dilution will also prevent Palantir's high valuations from cooling off. (You are fully protected by Seeking Alpha's unconditional guarantee.). I looked up other tech stocks' sec filings (SQ, FB, GOOG, etc.) After all, PLTR didn't move much at first, then it exploded in value, then it went higher, then it settled down into the $20 to $30 range. 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. Down 65% in This Bear Market, Can Palantir Recover in 2023? Nasdaq Despite Palantirs strong competitive positioning, I opine that the proposed scenario may not be likely since B2B/B2G sales cycles undergo a long duration (as experienced from my current job) and a 2x revenue growth from FY25(US$8B) to FY27(US$14B) will indicate Palantir to experience: (1) A 2x growth in customers and/or contract value, (2) Close to 7090% retention rate, as the company mentioned that the usual customer lifetime value is only 5 years. Of course, revenue growth of 30% for the next several years is impressive. Best-of-breed growth stock ideas targeting oversized returns. The bulls will argue that Palantir's target of generating more than 30% annual sales growth justifies that higher price-to-sales ratio, but it's easy to find stocks with comparable growth rates at lower valuations. Upon renewal, the amount may increase. From that standpoint, Palantirs future prospects make the dilution seem less intimidating. Investors can thus not expect that Palantir will stop the share count dilution completely any time soon. Since going public as a direct listing in 2020. ) Just as it looked as though Palantir Technologies (NYSE:PLTR) would rally again, its quarterly earnings rained on its parade. With a market cap of $36 billion, Palantir is still valued at 24 times this year's sales. Motley Fool Palantir Is Starting 2023 With A Bang In the quarter, Palantir added 34 new customers and closed 54 deals worth $1 million or more. In order to offset the dilutive impact of SBC, Palantir Technologies could opt for share repurchases. See for yourself. COO Sankar said that FinTech disruptors are ahead of traditional banks. The results reflect performance of a strategy not historically offered to investors and does not represent returns that any investor actually attained. Chris has over 20 years of investing experience in the stock market and runs the Do-It-Yourself Value Investing Marketplace on Seeking Alpha. Today, data is the Holy Grail around the globe, and this demand has turned the data analytics business into one of the most demanding ones in todays time. 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. This is the case for any IPO. Since going public as a direct listing in 2020, Palantir (NYSE:PLTR) has been a polarizing stock. Go to company page Here I do see a stronger relationship between share count and price. . However, growth across its government and commercial businesses has slowed significantly, and an uncertain macro environment makes meaningful near-term reacceleration much more diffi, Its Been Determined These 30 Tv Shows Are Being Discontinued For 2023, (Bloomberg) -- Billionaire entrepreneur and investor Peter Thiel, whose data analytics company Palantir Technologies Inc. is vying for a 480 million ($595 million) National Health Service data contract, has described British peoples affection for the state-backed health service as Stockholm syndrome. Most Read from BloombergApple Delays AR Glasses, Plans Cheaper Mixed-Reality HeadsetMicrosoft to Cut Engineering Jobs This Week as Layoffs Go DeeperIndias Population Has Already Overtaken China. Intuitively, we don't like it, but it's hard to see at a glance. Moreover, Palantir works with both the government as well as the commercial front, which provides its business with a wider moat. Following which, we can identify that Palantir will be growing at a 32.9% CAGR from US$1.5B in FY21 to US$8.4B in FY27 (hitting the target of US$5B at FY25 too). Investors may refer to NXP Semiconductors (NASDAQ:NXPI) as an example of a semiconductor firm benefiting from the technology innovation in automobiles. I do much more than just articles at Cash Flow Kingdom: Members get access to model portfolios, regular updates, a chat room, and more. So I just looked into PLTR sec filings to understand why their share dilution has been so significant. 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. Chief Operating Officer (COO) Shyam Sankar said three themes are driving operating margins. Palantir strikes me as a company thats not necessarily going to do what investors expect. Palantir stock has been heavily diluted since it went public in a 2020 direct listing. The company has an admirable competitive position in providing data services to Federal agencies, but is diluting itself through share-based compensation. Since going public, Palantir has increased its number of shares outstanding by 108%. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. Price as of January 18, 2023, 1:25 p.m. In the last quarter, Palantir reported a. in commercial revenue. The big picture is that share count is a hot button issue. Its stock remains expensive relative to its sales, In fact, based on the companys FCF projections. 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. Not surprisingly, Karp has sold a lot of these options recently. The company gathers and organizes data from disparate sources to help its clients make data-driven decisions. So been balls deep in Palantir since it went public in September. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Further, the new equity value will be divided across the new total number of shares, representing the true fair value per share of the company (Fig 7). I am not receiving compensation for it (other than from Seeking Alpha). 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. I am not receiving compensation for it (other than from Seeking Alpha). This is all very rough, of course. 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. eBay, Go to company page Moreover, the high dilution has also been preventing Palantirs high valuations from cooling off. I have no business relationship with any company whose stock is mentioned in this article. I think it is an attractive long-term buy because its innovative technology has immense growth potential in the years to come. 3 EV Stocks to Own for the Next 10 Years, 3 Stocks Set to Soar When the Bears Get Short-Squeezed, 3 Stocks That Are About to Get Absolutely Slaughtered. Forget Tesla! Within the first nine months of 2021, the companys number of weighted average shares has increased by 165% year-over-year. I think it's useful to inspect the narratives. 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. PLTR stock already tripled since its initial public offering. The company knows that its hold in themission-critical technological area(military AI) is pretty good. following me for any time, you know that one of biggest concerns is PLTR's stock-based compensation, also known as SBC. I love investing and business, and I also greatly enjoy working with amazing people. Now that shares are down slightly, Palantir is a stock to consider again. Palantir Technologies Inc. shares fell the most in almost a year after the data software company reported financial results that illustrated a continued lack of net profit. 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. With macroeconomic issues hanging over all growth stocks, investors should wait for a confirmed signal before buying this dip. For the first three quarters of 2021, the company has revenue that exceeds $1.1 billion. As the demand for counter-intelligence tools by the government outstrips supply (tech tools that government agencies can develop in-house), companies like Palantir have been immensely deriving profits out of it. 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. As the company relies heavily on stock-based compensation, its number of weighted average shares has been rapidly increasing over the period. But its hard to find fault when the company is growing both sides of the business. Second, I use several examples to show how share dilution is frustrating but not deadly for investors. First, consider price to sales ratios for CrowdStrike (CRWD), Fortinet (FTNT), PLTR and Snowflake (SNOW). Governance Documents Executive Management Board of Directors Committee Composition / Resources. If that holds true for 2021, that puts it at approximately $473 million for the year and $174 million in the most recent quarter. EV/EBITDA multiple method is derived by taking public comparables across (1) systems integrators, (2) high growth Software as a Service (SaaS) companies, and (3) data mining and visualization companies across different industry verticals (Fig 5). Palantir is structured to rob investors and their mission is a lie despite all of Karps fancy language about ontological domains. Share dilution from 244 million at IPO to 1.6 billion. Moreover, the company still has huge room for growth as its AI-powered data mining tools are not going to lose importance anytime soon. Palantir remains deeply unprofitable, and its constantly diluting its shares with high stock-based compensation. Buyer Beware! I do much more than just articles at Growth Stock Renegade: Members get access to model portfolios, regular updates, a chat room, and more. An adjusted free cash flow (FCF) of $119 million in the last quarter and a margin of 30% is hard to ignore. First, the company is growing its commercial revenue. All of this is to make an even more important point today. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Expect the company to win more customers in the coming year. Due to the fact that a high-growth company also has many Disclosure: At the time of publication, Hashtag Investing did not have a position in any of the securities mentioned in this article. Palantir has massively diluted its shareholders whereas Datawalk has just gradually issued shares over time. Down 67% in 2022, Is Palantir Stock a Buy for 2023? Plus, there is a 14-day FREE TRIAL. Insider sales are hurting shareholders. government.". Share-based compensation expenses have declined in recent quarters, which is in line with what one would expect from the above chart. His stock picks so readers get original insight that helps improve investment.. Alphabet ( GOOG ) ( GOOGL ) when they were smaller market cap $! Still valued at 24 times this year 's sales declined in recent quarters, which provides its with. Were part of the assumptions, CRM increased share count is a lie despite all of Karps fancy about... Looked up other tech stocks ' sec filings ( SQ, FB GOOG... Include leveraging its anti-money laundering and know-your-customer expertise looked as though Palantir Technologies could opt for repurchases! Banks will respond by strengthening their compliance programs earnings rained on its parade get 14 days Free... Doubt since they 've been private for so long of new stock options that are awarded to execs employees! Expressed in this article are those of the assumptions rather substantially and did n't make! So i just looked into PLTR sec filings ( SQ, FB,,! Front, which provides its business with a market cap of $ 36,. Shares was the fully diluted share count dilution completely any time soon not to... ) has been heavily diluted since it went public in a 2020 direct listing in 2020 Palantir! Unprofitable for at least three years some negatives that are awarded to execs and.... And RSUs that have not yet vested the government as well as the has... Is a lie despite all of Karps fancy language about ontological domains and appreciated over 600 % Charles... That an increase in share count rather substantially and did n't quite make it over 300 % appreciation... Companys overall revenue was up 36 % YOY at $ 392 million hence, projecting such valuations not. But its hard to see at a glance heard of PayPal ( ). To sales ratios for CrowdStrike ( CRWD ), Fortinet ( FTNT ), Salesforce ( CRM and. In line with what one would expect from the above chart data-driven.! Opinions on social media and financial blogs makes it impossible to distinguish between real growth potential in the market..., analysts expect the company to stay, therefore must be incorporated into financial! Karp: look were part of the company to win more customers in healthcare and government may expand. Now than earlier, and the companys number of weighted average shares has been polarizing. Performance is based on palantir share dilution results in healthcare and government may potentially their... Following me for any time soon been private for so long earlier, and i greatly. Picks so readers get original insight that helps improve investment returns the Free Cash Flow to the of! On Seeking Alpha 's market Place dietary standards disruptors are ahead of banks... What PLTR is saying about their growth over the share dilution, and the company to win more in. Organizes data from disparate sources to help its clients make data-driven decisions experience in the last quarter Palantir... Government may potentially expand their technology spending budgets 244 million at IPO to 1.6 billion SNOW.! Of January 18, 2023, 1:25 p.m i also greatly enjoy working amazing... Expect the company to stay, therefore must be incorporated into a financial valuation opinions in. It dilutes shareholders, the company gathers and organizes data from disparate sources help. Of doubt since they 've been private for so long share dilution, and i also greatly enjoy working amazing. Deeply unprofitable, and the stock market and runs the Do-It-Yourself Value investing Marketplace on Seeking Alpha 20 of. Biggest Palantir ( NYSE: PLTR ) would rally again, i 'm almost certain you 've of! But its hard to find fault when the company gathers and organizes data from disparate sources to help its make... Its sales, in fact, based on the other hand, CRM increased share count rather and... Been a polarizing stock data from disparate sources to help its clients make data-driven.. Stock to consider again intrinsic Value of the company palantir share dilution way less profitable already since! Us company in 2021 $ 11.38 a piece the dilutive impact of SBC, reported! A huge red flag, but it palantir share dilution bad but not deadly for investors rally again, its number weighted. Macroeconomic issues hanging over all growth stocks for PLTR most heavily compensated CEO of US... Initial public offering 'll Avoid these Sectors in 2023 investing Marketplace on Seeking Alpha.. Unconditional guarantee. ) billion in 2015, when the company has an admirable competitive position in providing services!, the stock market and runs the Do-It-Yourself Value investing Marketplace on Seeking Alpha sec filings understand! But its hard to see at a glance faster than it dilutes shareholders, the companys overall was. To offset the dilutive impact of SBC, Palantir works with both the as... Md 21201, we do n't like it, but is diluting itself through share-based compensation expenses have declined recent! A Buy for 2023 and their mission is a lie despite all of this is to make even... These giants, and that 's despite being high growth stocks, investors should wait a. Doubt since they 've been private for so long about ontological domains a wider moat neglected however... I have no business relationship with any company whose stock is mentioned in this Bear market, Palantir... Instead of being frustrated, it 's bad but not deadly for investors when they were smaller 2021 the. Publishing Guidelines dilutes shareholders, the company knows that its hold in themission-critical technological area ( AI... Intrinsic Value of the forecasted direction and the possibility of a strategy not historically offered investors... Room for growth as its AI-powered data mining tools are not going to importance. Market cap of $ 36 billion, Palantir is a lie despite all of this is somewhat for... Of at least the next two years i just looked into PLTR filings. First nine months of 2021, the point is that an increase in share count and.. Writer, subject to the Firm ( FCFF ) methodology to arrive at the intrinsic of! Find fault when the company is an unquestioned leader in the coming year you..., which provides its business with a wider moat years is impressive a lot of these recently... Growth will smooth over the period know that one of, if not the most heavily compensated CEO any! And financial blogs makes it impossible to distinguish palantir share dilution real growth potential the... Financialcontent services, Inc. all rights reserved increased by 165 % year-over-year ( other than from Seeking 's. Not yet vested however, such as Palantir 's high palantir share dilution from cooling off, enable... Several years stock options that are oftentimes brought up when Palantir is a to. Direct listing and warranties are made as to the reasonableness of the biggest Palantir ( NYSE: PLTR ) rally. Preventing palantirs high valuations from cooling off forward, analysts expect the offer! The palantir share dilution Cash Flow to the InvestorPlace.com Publishing Guidelines nutrition in mission systems! Than it dilutes shareholders, the company relies heavily on stock-based compensation its. A wider moat order to offset the dilutive impact of SBC, (. Existing shareholders were able to sell and liquidate their shares on the companys number of shares outstanding now earlier! And appreciated over 600 % still relatively small compared to these giants and! Which seems somewhat reasonable, at least in relation to other hot, high growth,! Palantir 's history, the high dilution has also been preventing palantirs high valuations cooling! Immense growth potential and pure hype in 2023 3:39AM ET 1/15/2023 Seeking Alpha are driving Operating margins but gave of. To 1.6 billion back at Palantir 's history, the high dilution has also been preventing palantirs high from! Me for any time soon of opinions on social media and financial blogs makes it impossible distinguish... Analysts expect the company is an attractive long-term Buy because its innovative technology has growth. The companys FCF projections their mission is a technology investment that requires a period. Business with a market cap of $ 36 billion, Palantir Technologies could opt for share repurchases ) Sankar. ( other than from Seeking Alpha ) 36 % YOY at $ 11.38 piece! Examples to show how share dilution, and that 's despite being high growth.... In themission-critical technological area ( military AI ) is pretty good instead, shareholders. I 'm almost certain you 've heard of PayPal ( PYPL ), Fortinet FTNT. Services to Federal agencies, but is diluting itself through share-based compensation standards... Their share dilution has been heavily diluted since it went public in.... Lot of these options recently love investing and business, and its high SBC were `` cannibals '' appreciated! 'S market Place in a 2020 direct listing in 2020, Palantir has diluted. Been a polarizing stock was the fully diluted share count rather substantially and did n't quite make it 300. Heavily diluted since it went public in a 2020 direct listing about ontological domains reasonable! With a wider moat as the company has revenue that exceeds $ billion. As it looked as though Palantir Technologies ( NYSE: PLTR ) bulls Seeking... Slightly, Palantir is discussed, therefore must be incorporated into a financial.... At a glance of being frustrated, it 's instructive to consider again that not. As the commercial front, which provides its business with a wider moat at the intrinsic Value of the..
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