Palantir
Palantir's software is used by government agencies for intelligence gathering, counterterrorism, and defense. The company is looking to expand into other areas like health care, energy, and manufacturing sectors. Palantir's stock was a growth stock darling due to Cathie Wood's large stake, and its popularity on Reddit's r/WallStreetBets.
Inside the Numbers
In Q4, Palantir reported $0.02 in earnings per share which fell short of analysts' expectations of a profit of $0.04 per share. Revenue topped expectations at $433 million vs. $418 million and was 26% higher than last year.
The company also added 34 new customers in Q4 and closed 64 deals in the quarter that were worth more than $1 million, 27 that were more than $5 million, and 19 larger than $10 million. The company also had an impressive net retention rate of 102%.
Palantir's commercial business is expected to be its biggest growth engine in coming years, and it had 34% growth in 2021 to reach $645 million. The number of customers on North American reached 80 after starting the year at 14. throughout 2021, with revenue up 34% year over year to $645 million. Government revenue gained 47% to $897 million for the full year.
Palantir's stock opened for trading in September 2020 at $10. It peaked in February 2021 at around $39 and is currently down by 73% from this high. It's also only 10% above its IPO price, meaning it's essentially reversed its entire rally.
Even after its decline, the stock remains quite expensive with a market cap of $23 billion and $1.5 billion in revenue. The company is expected to be profitable next year but is years away from reaching a reasonable valuation. Given that rates are likely to keep rising, only investors who are very confident in the management team's ability to maintain 30%+ revenue growth for multiple years should consider buying the stock at current levels.
