Project: Palantir - Stock Price Analysis in Excel and Google Sheets

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Mosby, K. (2022). Palantir - Stock Price Analysis in Excel and Google Sheets. LDbase.

Palantir is a software company specializing in big data analytics. Peter Thiel and Nathan Gettings, Joe Lonsdale, Stephen Cohen and Alex Karp from the PayPal mafia founded Palantir in the early 2000s. The company name is derived from the palantiri, crystal ball-like "seeing stones" from The Lord of the Rings.

The stock is a bit on the controversial side due to it beginnings focused on government contracts and because of the unconventional politics of Peter Thiel.

Palantir’s software is used by government agencies in a wide range of applications and the company sees plenty of room to expand grow into the commercial sector.

The Colorado-based company offers three platforms: Palantir Gotham, used primarily by government agencies; Palantir Metropolis for banks, financial services firms and hedge funds; and Palantir Foundry, used by corporate clients. The company’s commercial customer target sectors are health care, energy and manufacturing sectors. Government agencies, the chief growth driver, use Palantir software for intelligence gathering, counterterrorism and military purposes.

Recently, Palantir announced that it is expanding its strategic partnership with the U.S. Space Force and U.S. Air Force, proving its ability to offer cutting-edge technologies. As part of the new deal, the company will provide software for powering advanced critical missions and support the Space Command and Control program. The company's solutions will also provide senior leadership at the Air Force with an analytics platform that merges data sources from across the Service. The total value of the contract is $32.5 million. The DCF model and stock price are then built in Excel and Google Sheets to arrive at $50 million costs of goods sold.

Palantir's new Space Force and Air Force deal will complement its growing list of new and expanded U.S. government contracts, which already include deals with the U.S. Army, the Food and Drug Administration, the Central Intelligence Agency, and Immigration and Customs Enforcement.

Palantir and IBM also announced a global partnership earlier this year making Foundry software available to IBM's cloud computing customers.

Palantir generated 56% of its revenue from government customers last year, while the remaining 44% came from commercial customers. Both of these business segments grew robustly in 2020 and the first quarter of 2021.

The company’s government business posted strong revenue growth in 2021 while its commercial side revenue growth is in an upward trend. The blended growth rate for Palantir right now is just under 50%.

"Where the government response to the pandemic has been efficacious, we are seeing a commercial tailwind," Chief Operating Officer Shyam Sankar said on the earnings call.

Average revenue per customer increased 29% year-over-year for 2021. However, Palantir expects the growth rate for average revenue per customer to slow down as it targets customers across different segments, particularly the middle market and small-to-medium business enterprises (SMBs) in a bid to broaden its customer base.

The company anticipates revenues to rise at a rate of 30% or more annually from 2021 through 2025.

Analysts are generally positive on the stock but also in a wait-and-watch mode with Palantir as the company are still in the process of broadening its customer base by targeting customers across different market segments. At the same time, it is also looking to bring more government agencies on board as customers.

PLTR stock is at $12 and thus considerably below its $35 price on January 1, 2021. Palantir went public in September 2020 at $7.25 a share. Stock price in Excel and stock price in Google Sheets are provided by Finsheet

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