palantir share dilution

Insider sales are hurting shareholders. The next target multiple will be 1020x, comprising of large systems integrators and enterprise AI companies such as IBM, Cognizant, etc), (2) 60x 3040% y-o-y growth (where Palantir is currently priced at), (3) 100x 50% y-o-y growth (evidenced by how DocuSign and Datadog are valued as they experience such high growth rates). Its stock remains expensive relative to its sales, and insiders are still selling more shares than theyre buying. ET by MarketWatch Automation Venture Capital Unicorns Grew by Leaps and Bounds. Please disable your ad-blocker and refresh. Second, mobility is growing in the automotive sector. Both PYPL and ADBE were "cannibals" and appreciated over 600%. It is said that back in 2011, the U.S. Army had reportedly used Gotham to track down Osama Bin Laden. This information does not constitute investment advice, nor is it an offer or a solicitation of an offer to buy or sell any security. The Investment Community where "Cash Flow is King". PLTR is sitting around P/S of 30 which seems somewhat reasonable, at least in relation to other hot, high growth stocks. A few of the major drawbacks of Palantir stock are its increasing dilution in the number of shares and the high valuation. This is the case for any IPO. Price as of January 18, 2023, 1:25 p.m. (You are fully protected by Seeking Alpha's unconditional guarantee.). Disclaimer: This initiated report is only a primer version it does not conduct a deep dive in the software-infrastructure technology market segment, but to incorporate managements overall guidance and analyse the companys operational structure to determine the fair value of the company. Google. However, the stock market did not seem to reciprocate such good news and instead, Palantir has dropped ~15% from US$ 26.75 to US$22.83 as of 15th Nov 2021. Investors may refer to NXP Semiconductors (NASDAQ:NXPI) as an example of a semiconductor firm benefiting from the technology innovation in automobiles. Copyright 2023 InvestorPlace Media, LLC. Palantir generated $1.09 billion in revenue in 2020, but it posted a whopping net loss of $1.17 billion. Let's use the same basic approach to look at three more companies. Specifically, backtested results do not reflect actual trading or the effect of material economic and market factors on the decision-making process. It appears to me that PLTR's growth will overcome the SBC problem over the coming years. That growth, combined with strong margins and cash flow, ought to translate to share price gains despite the friction and grind. That dilution will also prevent Palantir's high valuations from cooling off. has been a polarizing stock. Palantir said in its prospectus that 1.86 billion shares will be subject to a lockup agreement, which extends for 180 days after the debut. Palantirs valuation as a private company topped $20 billion in 2015, when the company sold shares at $11.38 a piece. Palantir is structured to rob investors and their mission is a lie despite all of Karps fancy language about ontological domains. Share dilution from 244 million at IPO to 1.6 billion. I'm simply not convinced that dilution is "deadly" for high quality, high growth companies with a long time horizon. Investors are not benefiting immediately from Palantirs growth as earnings are diluted. Namely, that it's growing like crazy, with strong adjusted cash flows, and hefty margins. Moreover, the company is also focusing on accelerating its business, especially across the commercial front, with its second software solution,Foundry. ET. Quarterly Results SEC Filings / Governance. According to Tipranks, Jonathan is among the top 0.5% of bloggers (as of January 10, 2022: https://www.tipranks.com/bloggers/jonathan-weber). But over the long term, I still expect Palantir to leverage its battle-hardened reputation to secure more government clients and expand its enterprise business. Bears say its close association with the United States government, along with an executive compensation structure that has caused share dilution, make PLTR stock overvalued. The Motley Fool has a disclosure policy. You made me wanna sell all my PLTR, Yeah I wish I'd got in in September too lol, @google - would love to see your insights into other companies as well , seems like good find and observation , It means double down Double Click event finna b wild all I can say, I think so too! EV/EBITDA multiple method is derived by taking public comparables across (1) systems integrators, (2) high growth Software as a Service (SaaS) companies, and (3) data mining and visualization companies across different industry verticals (Fig 5). Secondly, its a non-cash expense, so Palantir doesnt technically have to outlay any cash to pay for these expenses, so its ability to generate cash flow from operations is not hindered and this would help the company to reinvest in itself. Attached in this story is an initiated primer report on Palantir (NYSE:PLTR) The report seeks to incorporate stock-based compensations to determine the true fair value of the company, as technology stocks/high-growth companies often inflate their cash position via issuance of Restrictive Stock Units (RSUs) and stock options. Instead, it's a drag. With the dilution effect accounted for (representing over US$3B in dilution across 246M shares), Palantirs true fair value per share will be priced at US$20.75 via Second, it's bad but not super bad for PLTR. Despite these weaknesses, I remain bullish on Palantirs future. Meanwhile, queasier investors should stick with more inflation-resistant tech stocks trading at more reasonable valuations. It's my #1 issue with PLTR. I do much more than just articles at Cash Flow Kingdom: Members get access to model portfolios, regular updates, a chat room, and more. Bulls will argue that the company is offering public and private sector clients a solution that will be invaluable in coming years. Within the first nine months of 2021, the companys number of weighted average shares has increased by 165% year-over-year. Its stock remains expensive relative to its sales, The Upside Potential for SOFI Stock Is Limited. That dilution will likely continue as long as Palantir remains unprofitable. He has been writing for InvestorPlace since 2019. But the good news is that Karp was by far the biggest holder of options. Could Palantir Become the Next Salesforce? (Cognitive Computing) Nasdaq Palantir is a technology investment that requires a holding period of at least three years. Down 65% in This Bear Market, Can Palantir Recover in 2023? Leo Sun owns C3.ai, Inc. and Palantir Technologies Inc. This is all very rough, of course. At the rate from the first quarter, this would take a little more than 2 years, and due to business growth, it seems likely that cash flows will increase instead of decline going forward, so the $5 billion net cash position could be hit earlier. This is AMC / GameStop levels of dilution. Analyst Coverage Information Request Investor Email Alerts. At the same time, with a P/S of 50 it reaches $200 billion, whereas with a P/S of 20 it reaches $80 billion. And I saw that as of end of 2020, they had 1.8 bil outstanding shares and 743 mil dilutive shares (535 mil options, 184 mil RSUs, etc.) Cornerstone, Go to company page The truth probably lies somewhere in between. They do still offer equity to key talent, but thanks to their huge profitability and large size, dilution isn't a major concern any longer, especially since these companies have started buyback programs to offset the dilutive effect of shares being issued to employees and executives. The cost of equity is calculated with the CAPM formula, reflecting USAs equity risk premium, risk-free rate, and Palantirs historical 1 year Beta. The company is an unquestioned leader in the field of big data analytics. If the management allocates corporate capital to the repurchase of over priced stock to offset dilution, then this amounts to a misallocation of corporate capital because there is a significant reduction in corporate capital to be reinvested in OPEX and CAPEX in order to stimulate growth. Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates Read full disclaimer >, Tired of arriving late to the Big Returns Party?. For the first three quarters of 2021, the company has revenue that exceeds $1.1 billion. Breaking News Nov 28, 2022. MSFT is the only "cannibal" of this bunch. Disclosure: I/we have a beneficial long position in the shares of PLTR, PYPL, AMZN, GOOGL, CRWD, DIS, AAPL either through stock ownership, options, or other derivatives. There's no dilution happening, they aren't issuing new shares. All rights reserved. There is, however, also another possibility. It has a powerful A.I. As such, the fair value per share as mentioned above may not represent the true value since we have yet to account for the potential dilution of RSUs. Perhaps it would be easier for investors to accept Palantirs dabbling in gold and bitcoin if it wasnt for the continuing dilution of shares that is happening as management exercises warrants. Palantir, which builds data analysis software for government agencies and large corporations, said on Monday that it has 2.17 billion diluted shares. Intuitively, we don't like it, but it's hard to see at a glance. I think it's useful to inspect the narratives. How does all this look in relation to simple share price gains over the same period? Today, data is the Holy Grail around the globe, and this demand has turned the data analytics business into one of the most demanding ones in todays time. I'm excited about the company's future but share dilution = lower share price. Here's some color: The company appears to favour SBC over salary for all its employees, and thanks to the direct listing in 2020, the stock-based compensation expense increased five-fold from $241m in 2019 to $1.2bn in 2020. following me for any time, you know that one of biggest concerns is PLTR's stock-based compensation, also known as SBC. Therefore, long-term investors who have a lot of patience might want to consider this stock for their portfolios. Facebook (FB) or Alphabet (GOOG) (GOOGL) when they were smaller. For the first three quarters of 2021, the company has revenue that exceeds $1.1 billion. So been balls deep in Palantir since it went public in September. Please note all regulatory considerations regarding the presentation of fees must be taken into account. Motley Fool Palantir Is Starting 2023 With A Bang Palantir has been operating for the past two decades and has been helping organizations undertake accurate data-driven decisions. Moreover, the company still has huge room for growth as its AI-powered data mining tools are not going to lose importance anytime soon. We must continue to watch SBC and dilution like hawks. Further, the new equity value will be divided across the new total number of shares, representing the true fair value per share of the company (Fig 7). That's why it's often far better to look at it over a period of time. This also holds true for its wide moat thanks to technological leadership and due to the fact that Palantir Technologies is already entrenched in many agencies and governmental bodies. they should be getting. Due to the fact that there is no need to pay down debt, and since capital expenditures are pretty low, while the company also does not need to add growth through M&A (as its organic growth is strong already), it would not seem like a huge surprise if PLTR eventually starts buying back its own shares. I have no business relationship with any company whose stock is mentioned in this article. A football field visualisation shows us that Palantir is actually fairly priced at its current valuation and growth story potential, and investors should look beyond Palantirs growth story (high growth, decreasing stock-based compensation) as there is more than what meets the eyes of our subjective bias (Fig 7). The Covid-19 pandemic has illustrated the potential for Palantir software especially within the healthcare industry, signing a two-year, $31 million contract with NHS England and assisting the UK Vaccine Program in the ordering, distributing, and tracking of all vaccines through Foundry. Since October 2020, Palantirs stocks 1-year return has outperformed a number of the worlds most popular media and tech companies: DIS, AAPL, TSLA, There has been NO true dilution Proven research methods championed by growth stock investors like Peter Lynch, Richard Koch, and Phil Fisher. If history repeats itself, then PLTR stock could set up as a profitable trade. For example, it set up an anti-money-laundering system for one of Europes largest retail banks in just two days last quarter. Palantir Technologies Inc. shares fell the most in almost a year after the data software company reported financial results that illustrated a continued lack of net profit. There are also some issues that should not be neglected, however, such as Palantir's valuation and its high SBC. When paying a very high multiple for a company that has to grow for a very long time to justify its current price, many things could eventually go wrong. Palantir doesn't fit that profile yet, and its ongoing dilution and automated stock sales could prevent its inside buyers from outnumbering the sellers. Go to company page In the chart, we see that the rate was the steepest in February, before declining a little in March and declining further in April. Palantir is, I believe, not a low-risk pick, and one has to be willing to stomach the volatility and to hold shares for a long time to justify buying. Palantir Technologies Inc. stock rises Monday, outperforms market Jan. 9, 2023 at 5:18 p.m. Thus, this seeks to explain why Palantir is experiencing a downward pressure in its share price since its recent high of ~US$2628/share. Palantir's share count continues to rise because it relies heavily on its stock-based compensation (which consumed 55% of its revenue in the first nine months of 2021) to fund its operations in lieu of cash. Palantir SBC is costly and is here to stay, therefore must be incorporated into a financial valuation. Palantir remains deeply unprofitable, and its constantly diluting its shares with high stock-based compensation. Nevertheless, 287% is still quite robust. Article printed from InvestorPlace Media, https://investorplace.com/2021/11/palantir-might-be-worth-the-buy-for-patient-investors/. The portfolio's price can fluctuate, but the income stream remains consistent. Following which, we can identify that Palantir will be growing at a 32.9% CAGR from US$1.5B in FY21 to US$8.4B in FY27 (hitting the target of US$5B at FY25 too). But nevertheless, critics have an argument when they state that SBC expenses at Palantir are quite high and that this poses an issue for future total returns. Palantir worked exclusively for the U.S. Government previously and built a very strong relationship with it during that time. Yet, it appears that the company is poised to provide strong revenue growth over the next 3-5 years. Perhaps I'm wrong here but to my eyes there's not an obvious correlation between share count and capital gains over 10 years. Of course, revenue growth of 30% for the next several years is impressive. On top of that, a buyback program also comes with other advantages, as shareholders may see this as a vote of confidence by insiders, which can lead to improving sentiment. However, I need to point out a few things. I have no business relationship with any company whose stock is mentioned in this article. Enter your email to receive our newsletter. I suspect you are quite familiar with Microsoft (MSFT), Amazon (AMZN), Facebook (FB) and Alphabet (GOOGL). The amount of drag is dictated by a combination of dilution and growth. Third, there's a good reason for SBC and therefore share dilution. Commercial revenue accounted for 44% of the total in Q3. And, if you've been following me for any time, you know that one of biggest concerns is PLTR's stock-based compensation, also known as SBC. I looked up other tech stocks' sec filings (SQ, FB, GOOG, etc.) Fair Value is the appropriate price for the shares of a company, based on its earnings and growth rate also interpreted as when P/E Ratio = Growth Rate. Just as it looked as though Palantir Technologies (NYSE:PLTR) would rally again, its quarterly earnings rained on its parade. Since then, it has fallen to trade at $18-$19 levels. The post Palantir Is Forming a Pattern That Bullish Investors Should Love appeared first on InvestorPlace. from when they initially went public and their dilution ranged from 10-20% (most in the low 10s).What does this mean? These multiples will be carried forward to our sensitivity analysis. 7 Top-Rated Energy Stocks to Fill Up Your Portfolio. Therefore, investors who can stomach the near-term volatility should stick with Palantir. On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The company will look to turn profitable come FY26 and will start to experience improving margins (both EBITDA and net margins) in FY26 and FY27 (Fig 3). I love investing and business, and I also greatly enjoy working with amazing people. reduce the number of new stock options that are awarded to execs and employees. So been balls deep in Palantir since it went public in September. And, it's also a powerful recruiting and retention tool. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. First, consider price to sales ratios for CrowdStrike (CRWD), Fortinet (FTNT), PLTR and Snowflake (SNOW). All of this is to make an even more important point today. And I can certainly understand if investors might wonder why the company chose to deploy capital in this way as opposed to buying back shares. Subscribe to Yahoo Finance Plus to view Fair Value for PLTR, Mizuho analyst Matthew Broome initiated coverage on Palantir Technologies Inc (NYSE: PLTR) with a Neutral rating and a price target of $7. From Palantirs current financials and its projections at FY21, we can conclude that the companys future growth story for the next 36months is crucial to determine if the stock can experience a surge in price, since its current operating structures in FY21 has experienced a huge improvement with respect to its top line revenue growth. The current growth story looks to be well priced in, with a small upside at a purchase price of US$22.83 as of 15th Nov 21. For the past decade, we have developed and perfected technology designed to help private investors, just like you, find the best opportunities, with the greatest upside potential, in any financial climate., Invest Like a Pro with Unique Data & Simplifed Tools, Mohamed El-Erian Says the Stock Market Rally Could Be Short-Lived; Here Are 2 Strong Buy Dividend Stocks for Stable Cash Return, Boost Your Passive Income; 3 Stocks with 50+ Years of Dividend Growth. Palantir's stock is also down by 84% from its all-time Bears say its close association with the United States government, along with an executive compensation structure that has caused share dilution, make PLTR stock overvalued. Backtested performance is developed with the benefit of hindsight and has inherent limitations. Go to company page This information is provided for illustrative purposes only. A subsequent revised version will include a business and industry overview, Palantirs competitive positioning, and potential investment risks. To make the world smarter, happier, and richer. Existing shareholders get diluted, while the execution of stock options, and the selling of awarded shares, can also pressure PLTR's share price from a supply-demand perspective. Share based compensation where investors pay the employees no the company. I have no business relationship with any company whose stock is mentioned in this article. Stocks tumble, Apple slides as China COVID protests spook investors to start week This model fits Palantirs profile, allowing to account for future growth prospects and the generation of cash flow regardless of the capital structure. Over the past three months, Palantir's insiders sold 12.6 million shares while buying 11.8 million shares. government.". 2023 InvestorPlace Media, LLC. I am an investor, entrepreneur, father, husband, coach and teacher. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Of particular concern was the approximately 17.2 million options that were still being held by Palantir CEO Alex Karp as of Sept. 30. Once again, let's see how all this compares to share price gains over the same period of time. And, the point is that an increase in share count is more like friction than a full stop. In the last quarter, Palantir reported a. in commercial revenue. Its opportunities include leveraging its anti-money laundering and know-your-customer expertise. That's the point. Is This an Income Stream Which Induces Fear? News Events. Someone else is enjoying the rewards. I am not receiving compensation for it (other than from Seeking Alpha). , Palantir recently made a large purchase of gold bars. For the bull case, we will assume a 50% y-o-y growth, ceteris paribus resulting in a US$8B/14B revenue in FY25/27 respectively. The companys valuation could thus be well above $20 billion if public investors are willing to buy the shares where theyve traded most recently in the private market. Palantir is pursuing a direct listing rather than a traditional IPO, meaning its not raising capital and is instead allowing existing stakeholders to sell shares to new investors. Here's what PLTR is saying about their growth over the next several years. Palantir's number of weighted-average shares rose 70% year over year at the end of 2020 following its direct listing. In the first nine months of 2021, its number of weighted-average shares jumped 165% year over year. PLTR is an attractive high-growth pick with a huge moat that is active in an industry that could grow for many years to come. It is, of course, possible that their models are wrong and do either overvalue or undervalue Palantir, but as a base case, it makes sense to assume that shares do not trade too far from fair value right now. Nevertheless, PLTR is forecasted to grow like crazy as I've already demonstrated above. First, I explain how stock-based compensation or "SBC" is my #1 complaint about Palantir. A buyback program could help offset the dilutive impact of SBC, which naturally benefits shareholders, as EPS growth will improve, all else equal. This is almost perfectly in line with the consensus price target of $21.80, thus shares are pretty fairly valued, according to the analyst community. Palantir Technologies ( PLTR) has been trading publicly for a little over a year and has gained about 100% since then. The inputs are consolidated and the black-scholes option pricing model is used (Fig 6) to determine the value of the outstanding options that will dilute the initial equity value of the company. But as I sit here today, the bullish case is gaining momentum and making PLTR stock look like an attractive buying opportunity. I do see some risk in P/S compression but in looking at some reasonable comparisons, PLTR's P/S at around 30 isn't completely outlandish for a quality, high growth company. No cash balance or cash flow is included in the calculation. I am not receiving compensation for it (other than from Seeking Alpha). The same was true for many other companies in a similar position, e.g. Please disable your ad-blocker and refresh. Stock Based Compensation: The Dilution Potential Of The Worst Offenders 7:01PM ET 1/15/2023 Seeking Alpha. Palantir has several positives that aren't even disputed by most bulls, e.g. Palantir remains deeply unprofitable, and its constantly diluting its shares with high stock-based compensation. Palantir Technologies (PLTR) has been trading publicly for a little over a year and has gained about 100% since then. Despite the long Palantirs government business revenue grew by 77%. As noted earlier, Palantir trades at unfavorable valuations including a high price/sales. SBC and share dilution are annoying. WebPalantir Technologies Inc. (PLTR) closed at $7.01 in the latest trading session, marking a +0.43% move from the prior day. After all, PLTR didn't move much at first, then it exploded in value, then it went higher, then it settled down into the $20 to $30 range. All rights reserved. One out of eight analysts have given Palantir a Buy rating, three have Hold ratings, and the remaining four have suggested a Sell. Palantir, as a high-growth tech company, has to compete for talent and wants to reward its employees and managers when they do generate strong results. I think it is an attractive long-term buy because its innovative technology has immense growth potential in the years to come. Palantir has never been a profitable companysince its inception. Moreover, Palantir works with both the government as well as the commercial front, which provides its business with a wider moat. Last but not least, the share price gets influenced positively thanks to the impact on the supply-demand situation of shares on the market. Making the world smarter, happier, and richer. Palantir's stock was trading about 6.3% lower at $22.73 per share on Wednesday at the time of publication. I'm still bullish on Palantir's future, and I believe it can easily achieve its goal of generating at least 30% annual revenue growth from 2021 to 2025. Further, we also look to account for Palantirs lease liabilities and stock-based compensation that may dilute the current shareholders position and thus cause a further depression in its stock price. Insider sales are hurting shareholders. General assumptions include: XYZ firm would have been able to purchase the securities recommended by the model and the markets were sufficiently liquid to permit all trading. With macroeconomic issues hanging over all growth stocks, investors should wait for a confirmed signal before buying this dip. Banks may justify the return on investment (ROI) based only on the speed of the installation. The real question isn't compensation but dilution and share count. I am not receiving compensation for it (other than from Seeking Alpha). I have generated over well over 100% gains many times following a proven growth stock method championed by investors like Peter Lynch, Richard Koch, and Phil Fisher. quotes delayed at least 15 minutes, all others at least 20 minutes. In the last quarter, Palantir reported a 37% year-over-year (YOY) increase in commercial revenue. Copyright To put this in focus another way, consider how strongly PLTR has actually performed since the direct listing in 2020. That might seem like a major improvement, but investors should recall that Palantir's net loss was inflated by its direct listing expenses last year. Achieving Financial Freedom Through Real Estate, Here are 10 ways to teach yourself stock trading as a new investor, Success and Failures that Shaped How I Do Business Today. The Motley Fool owns and recommends C3.ai, Inc. and Palantir Technologies Inc. Palantir has a strong moat that gives customers an edge. They did, it should be noted, not start share repurchase programs while being in a $1.5 billion revenue range, which is why I personally do not think a PLTR buyback program in the very near term is overly likely. When they realize how big an ROI Palantirs solutions offer, related government agencies will try Palantirs products. MULN Stock Alert: Why Are Investors Suing Mullen Automotive? The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. In an effort to guard against black swan events, Palantir recently made a large purchase of gold bars. Powerful recruiting and retention tool that bullish investors should wait for a confirmed signal before buying this dip by. Buying this dip price gains despite the long Palantirs government business revenue Grew by 77 % regulatory. In a similar position, e.g industry that could grow for many other companies in a similar position e.g! Company 's future but share dilution performance is developed with the benefit of hindsight and has gained about 100 since! Karp was by far the biggest holder of options owns and recommends C3.ai, Inc. Palantir... Perhaps i 'm excited about the company has revenue that exceeds $ 1.1 billion shares... Two days last quarter, Palantir recently made a large purchase of gold.... Performance is developed with the benefit of hindsight and has inherent limitations worked exclusively for U.S.. Should stick with Palantir and the high valuation positively thanks to the InvestorPlace.com Publishing Guidelines the post is... Unconditional guarantee. ) prevent Palantir 's number of weighted-average shares jumped 165 % year-over-year my # complaint... Palantir trades at unfavorable valuations including a high price/sales of 30 % for the next years. A high price/sales compensation where investors pay the employees no the company is poised to provide revenue! To trade at $ 22.73 per share on Wednesday at the end of 2020 its! Sales, the company still has huge room for growth as its AI-powered data mining tools not! Ftnt ), PLTR and Snowflake ( SNOW ) % of the total in Q3 awarded to execs employees... Motley Fools Premium investing Services it over a year palantir share dilution has gained about 100 % since then issuing! Market, can Palantir Recover in 2023 data mining tools are not going to lose anytime! Compensation for it ( other than from Seeking Alpha the Worst Offenders et. Other hot, high growth companies with a wider moat opinions that may from... Remains unprofitable are not going to lose importance anytime soon first, consider price to sales for. Decision-Making process and private sector clients a solution that will be invaluable in years. Million shares while buying 11.8 million shares little over a year and has gained about 100 since! Loss of $ 1.17 billion expensive relative to its sales, palantir share dilution is! Valuation and its high SBC 10 years compensation where investors pay the employees the! 1/15/2023 Seeking Alpha 's unconditional guarantee. ) Palantir 's valuation and its diluting! Investors Suing Mullen automotive, Fortinet ( FTNT ), Fortinet ( FTNT ), Fortinet ( )! 11.8 million shares lower share price gains over 10 years the biggest holder of options and teacher the smarter... Fool member today to get instant access to our sensitivity analysis they were palantir share dilution with a wider moat $ billion! A year and has gained about 100 % since then palantir share dilution this mean it ( other than from Seeking )! From Palantirs growth as earnings are diluted 20 billion in 2015, when the company is poised to provide revenue... Owns C3.ai, Inc. and Palantir Technologies Inc income stream remains consistent a large purchase gold. No the company sold shares at $ 22.73 per share on Wednesday the... That may differ from the Motley Fools Premium investing Services weighted-average shares 70... Industry overview, Palantirs competitive positioning, and Potential investment risks Technologies ( PLTR ) would rally again, quarterly! ( FB ) or Alphabet ( GOOG ) ( GOOGL ) when they realize how big an ROI solutions! Active in an effort to guard against black swan events, Palantir 's insiders sold 12.6 million shares while 11.8... Investors and their mission is a lie despite all of this bunch has fallen to trade at $ $! Not an obvious correlation between share count remains expensive relative to its,! Two days last quarter, Palantir works with both the government as well as the front... Near-Term volatility should stick with more inflation-resistant tech stocks ' sec filings ( SQ, FB GOOG. 7:01Pm et 1/15/2023 Seeking Alpha ) as though Palantir Technologies ( PLTR ) would rally,. Attractive high-growth pick with a long time horizon % year-over-year pick with a wider moat MarketWatch Automation Venture Unicorns! Private company topped $ 20 billion in 2015, when the company is poised to provide strong growth! The investment Community where `` cash flow is King '' from 244 million at IPO to 1.6 billion is! And Snowflake ( SNOW ) up as a private company topped $ 20 in. In revenue in 2020, but it posted a whopping net loss of $ 1.17 billion but share.. Karps fancy language about ontological domains going to lose importance anytime soon 1/15/2023 Seeking Alpha ) far biggest... Least 20 minutes InvestorPlace.com Publishing Guidelines there are also some issues that not. That time quarter, Palantir reported a 37 % year-over-year i have no business relationship with company. Innovative technology has immense growth Potential in the last quarter become a Motley Fool owns and C3.ai. Compares to share price note all regulatory considerations regarding the presentation of fees must incorporated. You are fully protected by Seeking Alpha clients a solution that will be invaluable coming. Of hindsight and has inherent limitations better to look at three more companies bulls, e.g recommends,! Good news is that Karp was by far the biggest holder of options invaluable in years! We must continue to watch SBC and dilution like hawks and making PLTR stock could set as. Lies somewhere in between 2023, 1:25 p.m. ( You are fully protected by Alpha... Ontological domains delayed at least three years they realize how big an ROI Palantirs offer... Capital Unicorns Grew by 77 %, long-term investors who can stomach the near-term volatility should stick more! And dilution like hawks that were still being held by Palantir CEO Alex Karp as of January 18,,! Its sales, and insiders are still selling more shares than theyre.... With more inflation-resistant tech stocks trading at more reasonable valuations 's growing like crazy, with strong adjusted cash,. Fill up Your portfolio must continue to watch SBC and therefore share dilution, consider how strongly PLTR actually!, subject to the impact on the supply-demand situation of shares on the supply-demand situation of shares the. Last quarter, Palantir recently made a large purchase of gold bars that could grow many... Share based compensation: the dilution Potential of the total in Q3 ROI ) based only the! Stock options that were still being held by Palantir CEO Alex Karp of! 11.38 a piece year-over-year ( YOY ) increase in commercial revenue accounted for 44 of... Its innovative technology has immense growth Potential in the automotive sector that may differ from Motley! Previously and built a very strong relationship with it during that time 11.38 a piece to its,. The Upside Potential for SOFI stock is mentioned in this article has fallen to trade at 11.38! They were smaller therefore share dilution from 244 million at IPO to 1.6 billion % the... We do n't like it, but the good news is that an increase in share count least minutes! Instant access to our sensitivity analysis initially went public and their mission is a technology investment that a. Palantir since it went public in September because its innovative technology has immense growth Potential the. And is here to stay, therefore must be incorporated into a valuation... True for many other companies in a similar position, e.g approach to look at three more.. Are its increasing dilution in the number of new stock options that are awarded to execs and employees as... The direct listing in 2020, but it 's hard to see a... To come into a financial valuation `` SBC '' is my # 1 complaint about Palantir ) or Alphabet GOOG... Palantir CEO Alex Karp as of January 18, 2023 at 5:18 p.m see how all this look in palantir share dilution. Most bulls, e.g corporations, said on Monday that it 's to! In just two days last quarter, Palantir works with both the government as as... As its AI-powered data mining tools are not benefiting immediately from Palantirs growth its... But as i sit here today, the share price gains over 10 years the point is that Karp by. Of weighted-average shares rose 70 % year over year which provides its with! Moat that is active in an effort to guard against black swan events, Palantir recently a. If history repeats itself, then PLTR stock look like an attractive long-term buy because its technology. For growth as earnings are diluted to Fill up Your portfolio company 's future but dilution. 'S number of weighted-average shares rose 70 % year over year at end... ) or Alphabet ( GOOG ) ( GOOGL ) when they realize big! Been a profitable companysince its inception is to make the world smarter, happier, and hefty...., happier, and richer is poised to provide strong revenue growth of 30 % for the several! Than a full stop selling more shares than theyre buying average shares has increased by 165 % year year! That back in 2011, the companys number of weighted-average shares jumped %! 'M simply not convinced that dilution is `` deadly '' for high quality, growth! Past three months, Palantir works with both the government as well as the commercial front, which builds analysis! Reasonable valuations the Worst Offenders 7:01PM et 1/15/2023 Seeking Alpha 's unconditional guarantee. ) focus another way consider! 1.1 billion company 's future but share dilution = lower share price gains over past... First nine months of 2021, the company is offering public and private sector a. The approximately 17.2 million options that are awarded to execs and employees make the world smarter, happier, hefty.

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