We've been asking ourselves recently if the market has placed a fair valuation on Palantir Technologies. Let's dive into some of the fundamental values of this Large-Cap Technology company to determine if there might be an opportunity here for value-minded investors.
Palantir Technologies's Valuation Is in Line With Its Sector Averages:
Palantir Technologies Inc. builds and deploys software platforms for the intelligence community to assist in counterterrorism investigations and operations in the United States, the United Kingdom, and internationally. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 30.44 and an average price to book (P/B) ratio of 4.19. In contrast, Palantir Technologies has a trailing 12 month P/E ratio of 683.2 and a P/B ratio of 65.38.
Palantir Technologies has moved 420.2% over the last year compared to 10.6% for the S&P 500 — a difference of 409.6%. Palantir Technologies has a 52 week high of $150.57 and a 52 week low of $21.23.
Wider Gross Margins Than the Industry Average of 63.49%:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $743 | $1,093 | $1,542 | $1,906 | $2,225 | $2,866 |
| Gross Margins | 67% | 68% | 78% | 79% | 81% | 80% |
| Net Margins | -78% | -107% | -34% | -20% | 9% | 16% |
| Net Income (M) | -$580 | -$1,166 | -$520 | -$374 | $210 | $462 |
| Net Interest Expense (M) | $3 | $14 | $4 | $4 | $3 | -$18 |
| Depreciation & Amort. (M) | $12 | $14 | $15 | $23 | $33 | $24 |
| Diluted Shares (M) | 577 | 979 | 1,924 | 2,064 | 2,298 | 2,451 |
| Earnings Per Share | -$1.02 | -$1.2 | -$0.27 | -$0.18 | $0.09 | $0.19 |
| EPS Growth | n/a | -17.65% | 77.5% | 33.33% | 150.0% | 111.11% |
| Free Cash Flow (M) | $333 | -$309 | $321 | $184 | $697 | $1,141 |
| CAPEX (M) | $2 | $12 | $13 | $40 | $15 | $13 |
| Current Ratio | 1.67 | 3.74 | 4.34 | 5.17 | 5.55 | 5.96 |
Palantir Technologies benefits from rapidly growing revenues and increasing reinvestment in the business, generally positive cash flows, and an excellent current ratio of 5.96. The company's financial statements show wider gross margins than its peer group and positive EPS growth.
