Is Palantir Technologies (PLTR) Still a Buy After Soaring 170%?

[View in browser]( [The Spill Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Financial Pros’ Top Big Data Analysis Stock Searches in the Last Month Rank Ticker Name Searches #1 [PLTR]( Palantir Technologies 125 #2 [MSFT]( Microsoft 119 #3 [MSTR]( Microstrategy 116 #4 [IBM]( International Business Machines 48 #5 [CRM]( Salesforce.com 22 #ad [Solar power boom creates investment opportunity]( Brought to you by [Streetlight Confidential and SolarBank Corporation]( [Billionaires pour money into booming sector... creates investment opportunity]( [Streetlight Confidential and SolarBank Corporation - Billionaires pour money into booming sector... creates investment opportunity]( Soaring demand for renewable energy — especially solar power — has created a green energy opportunity for investors who act now. Technological innovation, falling costs and billions of dollars in government spending have finally made solar power a viable energy alternative. There’s now so much money to be made in this sector that billionaires and private equity investors are pouring billions of dollars into clean energy companies. Even Jeff Bezos, Bill Gates, Richard Branson, Michael Bloomberg, Ray Dalio and many others have teamed up to invest more than $2 billion — with billions more to come [Get your free Special Report with all the details here.]( Is Palantir Technologies (PLTR) Still a Buy After Soaring 170%? There is a graveyard filled with failed meme stocks. Yet, Palantir Technologies (PLTR) skirted this fate by carving out a lucrative niche by serving government agencies and defense contractors. The stock has been on a tear, up 33% year-to-date and an astonishing +170% in the past year. Palantir's popularity among financial professionals is immense. Its ticker has been searched more frequently than even the AI giant Microsoft (MSFT). Despite its remarkable success, Wall Street analysts remain cautious. They assigned a hold rating to the stock. This begs the question: Is it too late for investors to hop on the Palantir bandwagon? Or is there still room for growth? Palantir’s Business Palantiris revolutionizing the world of big data analytics helping organizations make sense of vast and complex data sets. Founded in 2003 by a group of entrepreneurs and investors, including Peter Thiel, the company has rapidly grown to become a major player in the industry, with a unique focus on serving government agencies and large enterprises. Palantir offers two main products: - Palantir Gotham - Enables analysts to integrate, visualize, and explore data from various sources for counter-terrorism, cybersecurity, and intelligence operations. - Palantir Foundry - Allows businesses to transform, analyze, and collaborate on data across different departments and functions. The company serves a diverse range of customers, including government agencies, defense contractors, financial institutions, healthcare providers, and manufacturing companies. Palantir segments its business into two main areas: - Government (53% of total revenues) - Includes contracts with various government agencies for data analytics and software solutions. - Commercial (47% of total revenues) - Comprises income from non-government clients across industries such as finance, healthcare, manufacturing, and aviation Palantir has been making significant strides in expanding its reach and capabilities. The company recently introduced Foundry for Builders, an initiative aimed at supporting startups and younger companies as they grow. This move showcases Palantir's commitment to fostering innovation and extending its services to a broader range of customers. Additionally, the company has been investing heavily in its AI and machine learning capabilities, enhancing its platforms' ability to derive insights from complex data sets. Looking ahead, Palantir has several exciting projects in the pipeline. The company is collaborating with the U.S. Army on the development of the Tactical Intelligence Targeting Access Node (TITAN) systems, a contract worth $178.4 million. This partnership highlights Palantir's expertise in providing cutting-edge solutions for defense and intelligence operations. Moreover, Palantir's recent $99.6 million agreement with the U.S. State Department for health monitoring software demonstrates the company's expanding presence in the government sector and its ability to apply its technology to diverse domains. Financials [Financials] Source: Stock Analysis Beyond Palantir’s success growing revenues, the company achieved GAAP operating profitability for the fourth consecutive quarter with operating marge up 1.5% Year-over-Year. Consequently, free cash flow margin expanded to 31.3%, allowing the company to squirrel away cash on its balance sheet for the future. And with no debt, management can use this money how it sees fit. Valuation [Valuation] Source: Seeking Alpha Palantir has no real direct competition. So, we compared it to other large data companies. Overall, Palantir is quite expensive. It runs at more than twice the price-to-cash flow ratio as Microsoft and has a P/E multiple that’s well over 100x whether looking at trailing or forward earnings. The main drag on Palantir’s earnings are its stock-based compensation. Exclude those and you get P/E ratios in line with its price-to-cash ratio. Yet, even Palantir’s forward price-to-cash flow ratio of 67.7x is rich. Does the company’s growth support this? Growth [Growth] Source: Seeking Alpha Compared to its peers, Palantir has the best revenue growth whether looking at one or multiple years. However, it’s only recently translated that into earnings. And according to the earnings presentation, the company expects adjusted free cash flow of $800M-$1B in 2024, or about $0.50 per share. Profitability [Profits] Source: Seeking Alpha As we noted earlier, the P&L margins are dragged down by share based compensation. So, looking at the free cash flow margins, Palantir is up there with the best of them, including Salesforce.com (CRM). [Wealthy investors pour billions into clean energy companies]( Soaring demand for renewable energy — especially solar power — has created a green energy opportunity for investors who act now. Technological innovation, falling costs and billions of dollars in government spending have finally made solar power a viable energy alternative. There’s now so much money to be made in this sector that billionaires and private equity investors are pouring billions of dollars into clean energy companies. Even Jeff Bezos, Bill Gates, Richard Branson, Michael Bloomberg, Ray Dalio and many others have teamed up to invest more than $2 billion — with billions more to come [Get your free Special Report with all the details here.]([Ad] Our Opinion 6/10 While Palantir is a fantastic company, we can’t get behind its current valuation. P/E ratios will normalize as stock compensation decreases. Yet, without returning cash to shareholders, this stock just doesn’t offer a compelling investment at these prices. We’d become interested if shares started trading around $15. 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