Don't Miss These Facts About Palantir Technologies

Palantir Technologies logged a -0.8% change during today's afternoon session, and is now trading at a price of $17.81 per share.

Palantir Technologies returned gains of 176.2% last year, with its stock price reaching a high of $21.85 and a low of $5.92. Over the same period, the stock outperformed the S&P 500 index by 153.2%. More recently, the company's 50-day average price was $18.07. Palantir Technologies Inc. builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations. Based in Denver, CO, the large-cap Technology company has 3,810 full time employees. Palantir Technologies has not offered a dividend during the last year.

Growing Revenues With Increasing Reinvestment in the Business:

2018 2019 2020 2021 2022 2023
Revenue (MM) $595 $743 $1,093 $1,542 $1,906 $2,125
Revenue Growth n/a 24.71% 47.15% 41.11% 23.61% 11.51%
Net Interest Expense (MM) $3 $3 $14 $4 $4 $37
Depreciation & Amort. (MM) $14 $3 $14 $15 $23 $33
Free Cash Flow (MM) -$52 $333 -$309 $321 $184 $475
Capital Expenditures (MM) $13 $2 $12 $13 $40 $15

Palantir Technologies has growing revenues and increasing reinvestment in the business, low leverage, and irregular cash flows. However, the firm has consistently negative margins with a stable trend. Finally, we note that Palantir Technologies has flat EPS growth trend.

The Market May Be Overvaluing Palantir Technologies's Earnings and Assets:

Palantir Technologies has a trailing twelve month P/E ratio of 258.1, compared to an average of 35.0 for the Technology sector. Based on its EPS guidance of $0.29, the company has a forward P/E ratio of 62.3. The 3.2% compound average growth rate of Palantir Technologies's historical and projected earnings per share yields a PEG ratio of 80.31. This suggests that these shares are overvalued. Furthermore, Palantir Technologies is likely overvalued compared to the book value of its equity, since its P/B ratio of 12.14 is higher than the sector average of 7.92. The company's shares are currently trading 1209.2% above their Graham number. Overall, Palantir Technologies's lofty valuation in terms of earnings and assets is to some extent attenuated by its strong cash flow trend and reasonable levels of debt.

Palantir Technologies Has an Average Rating of Hold:

The 14 analysts following Palantir Technologies have set target prices ranging from $5.0 to $25.0 per share, for an average of $15.43 with a hold rating. As of April 2023, the company is trading 17.1% away from its average target price, indicating that there is an analyst belief that shares are overpriced.

Palantir Technologies has an average amount of shares sold short because 6.4% of the company's shares are sold short. Institutions own 40.0% of the company's shares, and the insider ownership rate stands at 6.88%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $3,335,658,640.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.