PLTR
💰 Palantir reported strong quarterly results, beating expectations and raising guidance across key metrics, showcasing robust growth, especially in U.S. commercial revenue.
📈 Despite impressive free cash flow generation and positive operational performance, the stock fell post-earnings, likely due to its already high valuation near all-time highs.
🤔 The analyst acknowledges the company’s strong execution but expresses caution due to elevated valuation multiples and the inherent risk associated with growth expectations, comparing the setup to Google’s pre-earnings situation.
@bernardodegarcia:
“Let’s look at Palantir, this literal cash flow behemoth. I don’t know if you’ve seen it, but over the last few years, Palantir has done extraordinarily well regarding cash flow. Look at how the free cash flow has evolved; it’s tremendous. Anyway, let’s look at Palantir shares. Wow, recovery to historical highs just before releasing quarterly results. Okay, Palantir reported. Revenue grew 55% year-over-year and 13% quarter-over-quarter. Commercial revenue grew 71%, government grew 45%. Revenue grew 39% year-over-year and 7% quarter-over-quarter. We closed 149 deals of at least $1 million, 51 of at least $5 million, and 31 of at least $10 million. It was our best quarter for U.S. commercial, up 183% year-over-year. Commercial remaining deal value is $2.32 billion. The number of customers grew 40% year-over-year. Rule of 40 score was 43. Cash from operations was $310 million, a 35% margin. Free cash flow was $370 million, representing a 42% margin. Wow, what a beast. For the outlook, we expect revenue between $934 and $938 million. That’s a quarterly revenue increase of 5%, compared to 7% this quarter. Not bad. For the full year, we are increasing our revenue guidance to $3.8-$3.9 billion, increasing our U.S. commercial revenue guidance to over $1.18 billion, representing 68% growth, and increasing our free cash flow guidance to $1.6-$1.8 billion. Wow. Okay. Very strong, eh? If the shares are falling now, it’s because they are at highs. It seems like the same setup, exactly the same setup as Google’s earnings. Before knowing Google’s earnings, no matter how good Google’s quarterly results were, realize that Google was at highs and needed bombshell results to keep rising. It’s a bit similar to Palantir, right? I say this in case you bought it today or in the last few days. I wouldn’t despair. It’s not my type of company, okay? It seems extraordinarily… not that it’s expensive, but the valuations are very high, and that entails an inherent risk that if the company stops growing as the market expects it to, the shares will fall. For me, that’s too risky, and I don’t want to risk it, but it’s true that I wish I had been in it a long time ago, eh? And congratulations to all of you who are in it making money. Now they are falling. I don’t know what will happen after the earnings call. Alex Karp, the CEO of Palantir, well, God knows what he’ll say. I loved that they came in so strong with such positive quarterly results and raised guidance on almost all the metrics we look at. But as you see, well, that’s a bit insufficient to tell Wall Street that the shares have to keep rising because, well, there’s a certain risk, but it was already at the maximum. If the shares were, say, 20% lower, they would easily rise 10%, but they are at the top. So, well, they could fall 15%, but long-term, it still seems like a tremendously bullish story to me. Ah, it’s a shame I don’t understand it and that I don’t have the confidence and security in where not only Palantir but Palantir’s shares will be in 10 years, especially because of where the shares already are, right? Eh, what return on capital are we looking to obtain with a company that reports how much annual free cash flow? $1.7 billion in annual free cash flow, okay? And obviously, it’s growing it at a very good pace, but it already trades at almost $300 billion market cap.”
Watch the exact part of the video where Bernard talks about Palantir here:
Watch the video on YouTube
Read more articles analyzing Palantir (PLTR) at the following link. PLTR stock.
