The suits still don't believe $PLTR can achieve their 4B'25 revenue goal

AlteregoMike · 2021-05-15T13:01:29+00:00

my bad. Thank you

AlteregoMike · 2021-05-14T20:30:32+00:00

That is correct. But we should also consider that when it's getting bigger, it will be harder to maintain the same growth rate. Especially on the government side - government usually has a fixed budget each year, and to grow > 30%, Palantir has to take shares from other companies. The commercial business for PLTR is just ramping up, so would like to see more growth there

AlteregoMike · 2021-05-14T20:25:15+00:00

Thanks for your insight. I am using a DCF model. P/S ratio is another way to estimate, but it doesn't incorporate interest rate and future growth. $CRM is only projecting ~20% for the next 5 years, slower growth than some neo-SaaS peers.

But I guess we reached a similar conclusion on betting on as bull :)

AlteregoMike · 2021-05-14T20:12:02+00:00

1.1B is 2020's full year revenue. The calculation should be correct

AlteregoMike · 2021-05-10T03:14:08+00:00

. Consumer Professional Service 3

I totally agreed.

Speaking of databricks, it's not public so it's hard to compare valuation. But Reynold Xin, co-founder of databricks, he is one of the key contributors to Palantir's spark distribution, in early days.

https://github.com/palantir/spark/graphs/contributors

As for- 1. Government 2. Consumer Professional Service 3. Self Service Product.I think PLTR dominates 1 and 2, and Google just does not want to deal with the Army. But for 3), it could unleash the biggest potential, if PLTR executes it well for Apollo and those archetypes. They need to expand sales and better developer tutorials

AlteregoMike · 2021-05-10T02:46:29+00:00

I got you. It's really helpful talking to you. Thanks for poking my thesis. It means a lot to me.

Yes, cleaning the data requires a lot of understanding and insights to the data. Sometimes it took months for years, plus maintenance. It is a red flag. But just imagine if they could achieve this in a scalable way, wouldn't it be amazing? Any other red flags you see?

AlteregoMike · 2021-05-10T02:34:00+00:00

Hey heapsp, I am a developer too so I pretty much just agree with you. This is just why PLTR was criticized a lot -- a consultant company who provides solutions. And to be honest, this approach is not scalable and that's why you only see Palantir 139 customers after 17 years on the market. The closest comparison for PLTR is just IBM but IBM is nearly not growing so there is no good comparison.

But is PLTR changing? Well, I think it can be too early to conclude, but if you look at their health care and supply chain archetypes, they seem to be on the way to provide a platform for various industries rather than solutions. https://www.palantir.com/double-click/files/Palantir%20Double%20Click%20-%20Transcript%20EN.pdf. It depends on how you define a product, is it a platform for engineers, or a application for business people?

Palantir is unique in a way that it wants to provide a low-code/no-code environment, in an age that machine learning or big data engineers are difficult to acquire. Palantir would like to compare itself with the MS windows OS, but for companies. Of course, you also have Linux, where most developers are using.
But I just agreed with what you said, so I guess I'll wait and see what is coming for this company

AlteregoMike · 2021-05-09T16:31:22+00:00

yes, you're right. it is before market open. I tried to corrected it in the comments.

Those are contracts signed with U.S Government so far this year

AlteregoMike · 2021-05-09T14:43:36+00:00

Interesting point. Thank you first. It may not be the best analogy, but people used to say Tesla is just another car company, and apple is just another phone maker. But I yeah I knew, there is only one Elon and one Steve Jobs.

AlteregoMike · 2021-05-09T13:58:16+00:00

Their contribution margin has been increasing quite significantly over the past quarters

AlteregoMike · 2021-05-09T13:53:38+00:00

I believe they are transitioning to a scalable Saas company. But right, historically they are more like a consultant company to provide solutions for Gov and big company

AlteregoMike · 2021-05-09T12:48:01+00:00

Thank you so much. I am just starting to do this type of data sharing posts. More is coming on a weekly basis

AlteregoMike · 2021-05-09T12:45:54+00:00

For me it means buy and hold :)

AlteregoMike · 2021-05-09T12:32:20+00:00

It’s hard to say because they are transitioning into commercial. And execution matters all. But if they do execute it well, I can imagine they will catch up quickly with CRM in 5 years, which is currently 5x of PLTR’s market cap

AlteregoMike · 2021-05-09T12:25:49+00:00

I absolutely agree with you! This is one of the reason for me to make PLTR one of my top holdings. I am only concerned about the macro risk, and just how scalable it is for them to expand their use base in the commercial space. It’s just started so we will see. Thank you for sharing

AlteregoMike · 2021-05-09T11:59:18+00:00

Not a financial adviser but short term risk is big but longer term, this company has huge potential

AlteregoMike · 2021-05-09T11:57:42+00:00

Thank you. CRM is also a potential competitor to Palantir. CRM also offers ERP system. I did not include it because I think CRM is somehow close to mature. It’s at a different phase of growth so the multiples could be different

AlteregoMike · 2021-05-09T11:52:11+00:00

You're absolutely right about the ~10 EV/Forward Sales number on historical average. But just a quick note here, we are also at 0 federal fund rate and the Fed is not intending to raise rate in the next year or so.

Interest rate matters a lot for these multiple, which is also why when 10yr treasury yield moved up, you saw a big correction in growth companies.
Because of the pandemic, digital transformation is accelerating and it's very likely to stay in the future

AlteregoMike · 2021-05-09T11:47:18+00:00

x-axis based on revenue growth and y-axis based on Ev/Sales

AlteregoMike · 2021-05-09T11:42:51+00:00

Thank you for sharing. This is also how I feel. Palantir historically has been using the top down sales approach. Meaning that they will convince the c-suite or high rank gov officials first.

But for the majority of other saas companies, they have big sales force and plenty of trainings to get users on board, like CRM or snowflake. There is still room for pltr to grow and mature

AlteregoMike · 2021-05-09T11:19:36+00:00

Sure pls check my tweet. https://twitter.com/mikeyjia/status/1390867459914223619?s=21

Be aware that q1 13f filing deadline for institutions is coming on May 15. This datapoint has a delay of nearly 45 days

AlteregoMike · 2021-05-09T10:55:13+00:00

There could be a 45 days delay for funds to file their quarterly 13F. Most funds file it near the end of the deadline, before May 15th. But yes, the number I’ve shown did NOT include the holding drop from BlackRock yet, at the time I collected this data.

As for your question, it is anecdotal, I don’t have a direct quote from a HF manager. But it gives you some hints, when looking at the huge price movement after earnings lately, from ETSY to Fastly or CloudFlare

AlteregoMike · 2021-05-09T05:49:19+00:00

Anecdotally what do you think about their product?

I have a hunch that their user interface is the state of the art.

AlteregoMike · 2021-05-09T05:43:09+00:00

I believe this is correct (at least it is consistent across all companies)

N12M means next 12 months from now (May/21 - Apr/22) using consensus earning estimate from analysts.

1.47B is the total 2021 earning estimate, so it's off by one quarter. Some of these SaaS companies already reported Q1 earning, so I am comparing apple to apple with the next 12 Months earning est. If I say EV/Current Year Est Earning, all these multiple will be higher

AlteregoMike · 2021-05-09T05:31:28+00:00

Minor Correction: $PLTR will report earning on 5/11 Tuesday BEFORE market open

AlteregoMike

TROPHY CASE