Snowflake

+++ Palantir Technologies Inc. (PLTR) - A brief analysis +++

$PLTR (+6,35 %) is a leading data analytics and artificial intelligence (AI) company characterized by its innovative technology and strong focus on safety-critical applications in both the public and private sectors. Since its IPO in 2020, Palantir has attracted both enthusiasm and criticism - not only because of the disruptive nature of its business model, but also because of its dependence on government contracts and its sometimes aggressive valuation on the stock market.

In 2024, Palantir has made significant progress, both in its financial results and by increasing its market presence in the field of artificial intelligence. However, the stock has become a point of contention as it is currently at historically high levels, while many analysts point to potential risks and overvaluation.

After Palantir has generated more than 300% returns in one year, there is such fomo in the market but also on getquin, is this justified?

1. business areas and products

Palantir specializes in providing complex data analytics to help businesses and governments make critical decisions. The company offers two main platforms:

1.1 Palantir Gotham

• Target group: Primarily governments, security agencies and the military.
• Function: Facilitates the evaluation of large, unstructured data volumes in order to detect threats at an early stage and optimize decisions in security-relevant areas.
• Areas of application: Counter-terrorism, military operations, national security.

1.2 Palantir Foundry

• Target group: Companies in various industries, including energy, healthcare and finance.
• Function: Enables integration and analysis of disparate data sources to optimize processes and make strategic decisions.
• Growth: Foundry has grown in importance in recent years as companies increasingly rely on data-driven decisions.

1.3 Apollo

• Target group: Both public and private clients.
• Function: Provides real-time AI-driven decision-making processes and ensures that Palantir's software can be continuously updated and scaled.
• Significance: This platform is considered a key product driving Palantir's expansion in the field of artificial intelligence.

2. market position and competitive environment

Palantir operates in a highly competitive market. Its main competitors include:

• Snowflake $SNOW (+0,59 %)
  : Focus on cloud-based data platforms.
• Databricks $DBRX Specialized in machine learning and big data analytics.
• Google Cloud and Microsoft Azure $GOOGL (+0,94 %) & $MSFT (-1,05 %) Also offer AI and data analysis solutions, but benefit from their broader product portfolio

Strengths of Palantir:

• Proprietary technology: Palantir develops customized solutions that are deeply integrated into customers' workflows.
• High barriers to entry: Palantir's complex and specific applications create long-term customer loyalty.
• Strong customer base: Over 60% of sales come from long-term contracts with governments and large corporations.
• Huge market: The AI market has huge expected CAGR over the next few years (and we are still at the beginning of this journey)

Weaknesses:

• Dependence on the public sector: Significant portion of revenue comes from government contracts, making the company vulnerable to budget cuts.
• High cost structure: Despite the scalability of the products, the cost base remains relatively high due to high development spend and customer acquisition.
• Share dilution: In recent years, Palantir has increased its outstanding shares by 20%

3. recent developments and strategic initiatives

3.1 New contracts and partnerships

• Contract with the US Department of Defense: Palantir was awarded a contract worth USD 36.8 million in December 2024 to support the U.S. Special Operations Command. This strengthens market leadership in the defense sector.
• Partnerships with AWS and L3Harris: These collaborations aim to extend the reach and functionality of Palantir's platforms in the military and commercial sectors.
• Healthcare sector: Palantir is working with leading pharmaceutical companies to provide AI solutions for clinical trials, drug discovery and supply chain optimization.

3.2 Artificial intelligence as a growth driver

The integration of generative AI and advanced analytics into the existing platforms has contributed significantly to the increase in sales in 2024. Customers are increasingly relying on Palantir to automate AI-driven decision-making processes.

3.3 International expansion

Palantir has strengthened its presence in Europe and Asia. The company is becoming increasingly important, particularly in the area of critical infrastructure analysis, as governments and companies arm themselves against cyber threats.

4.1 Current results (Q3 2024)

• Revenue: USD 725 million (+30% compared to the previous year).
• Gross margin: Over 80%, underlining the high scalability of the business model.
• Net result: Fourth consecutive GAAP-positive quarter, a milestone in the company's history.
• Free cash flow: Over USD 300 million, indicating strong operational efficiency.

4.2 Forecasts for 2024

• Total expected revenue: Over USD 3 billion.
• Growth drivers: Increase in government contracts, rising adoption of AI solutions and expansion in the commercial sector.

4.3 Valuation

The share is currently valued at a price/earnings (P/E) ratio of over 400, based on expected earnings for 2025 in bullish scenarios at 150. This indicates a very optimistic market expectation.

This shows that Palantir is currently valued historically (very expensive), given the status quo growth!

Here is a comparison of the dotcom ratings of well-known companies (P/S ratio) - Palantir currently has a 60 P/S ratio.

5 Valuation

With a current price of around USD 72 (as at December 2024), the share is trading well above its fair value of USD 19 as estimated by Morningstar. This could lead to sharp price losses in the event of disappointing results or negative news, but also shows how wide the discrepancy in valuation currently is!

6. fair value estimate

Based on the discounted cash flow model (DCF) and taking into account a conservative growth rate of 20%, the fair value amounts to USD 25. This estimate takes into account the long-term opportunities offered by AI, but also the risks of a potential slowdown in growth and the high dependence on government contracts, but with old valuation schemes that are not always based on growth values!

Conclusion

In my opinion, PLTR is currently historically expensive, with lower growth opportunities than other companies in the market e.g. $HIMS (-1,68 %)

For this reason, I am currently waiting for healthy profit-taking and continue to look at Palantir's business model!

👍 = I am not invested

❤ = I am invested

If this article has provided you with any added value, I would be delighted to receive a few Getquin coins :)

The chart shows the extent to which the Remaining Performance Obligations (RPO) of Snowflake
$SNOW (+0,59 %) grew between January 2020 and October 2024.

RPOS indicate how much turnover
Snowflake can still expect from existing contracts, but which has not been realized.

Key facts:

Strong growth: RPOs have risen from USD 426 million in January 2020 to USD 5,732 million in October 2024 - an increase of 1244.59%.

Rapid growth: RPO grew by an average of 72.75% per year.

Steady development: RPOs have been rising steadily since 2022, with clearly recognizable quarterly increases.

This development shows that more and more customers are relying on Snowflake in the long term, which clearly demonstrates the strength of the company and its business model.

$SNOW (+0,59 %) do you think it's too late to invest or where do you see the share in a few years 🤔

Citi has raised the price target for Snowflake
$SNOW (+0,59 %) today from $183 to 225 $ and confirmed its buy recommendation.

Photo: snowflake.com

$SNOW (+0,59 %) I got in at €100.27 and am considering whether I should set a stop price at €160. I am (mentally) bullish up to €170-177 but unsure. What is your opinion on the share?

22.11.2024

Snowflake rises up to 25% + Bitcoin almost at $100,000 + Rotation in MDax + Carl Zeiss Meditec falls to low since 2018 + Berenberg rates CTS Eventim a 'Buy' - target 100 euros

The Snowflake $SNOW (+0,59 %) shares rose 25% after the data analytics provider raised its full-year product revenue guidance and announced that it has partnered with AI company Anthropic to expand its cloud services.

The Bitcoin $BTC (-1,73 %) reached just under $100,000 overnight and currently stands at $99,000.

What do you think, will Bitcoin reach $100,000 in November, or even today?

The US bank JPMorgan expects only a few changes for the next index review by Deutsche Börse at the beginning of December. While everything should remain the same in the leading Dax index, analyst Pankaj Gupta expects a swap in the mid-cap index below it, the MDax, where, according to him, industrial recycler Befesa will probably make way for drug researcher Evotec $EVT (+1,24 %) will have to give way. Befesa $BFSA (+2,16 %) would be relegated to the SDax, the index of smaller stocks. In the TecDax, Gupta expects that SMA Solar $S92 (+0,6 %) will make way for the internet service provider Ionos $IOS (-2,68 %) Deutsche Börse will review the indices of the Dax family (Dax, MDax, SDax and TecDax) on Wednesday, December 4, and announce any changes after the close of trading in the US. The changes will come into effect on Monday, December 23.

The downturn in the share price of Carl Zeiss Meditec $AFX (+0,2 %) continued on Thursday with a new six-year low. The trend at the medical technology manufacturer has been pointing downwards since 2021, and this trend has intensified in the current year since March. At that time, the shares were still trading above 123 euros. On Thursday, the drop of over four percent pushed them down to 54.45 euros. This marks the lowest level since April 2018. With brief exceptions in August and late October and early September, the shares have been trading below the 200-day line, which is a popular long-term indicator for chart-oriented investors, for months. Jack Reynolds-Clark from RBC Research did not paint a good picture for the company at the beginning of November, downgrading it to "Sector Perform" due to uncertain demand in the various end markets. He emphasized that the consensus for 2025 depicts a rather optimistic scenario that is difficult to justify.

The private bank Berenberg has raised its rating for CTS Eventim $EVD (-0,58 %) to "Buy" with a target price of 100 euros. The event organizer presented mixed quarterly figures, wrote analyst Gerhard Orgonas on Thursday evening. He cut his earnings estimates until 2026, taking into account integration costs and a slightly lower ticketing margin.

• CTS Eventim increased its consolidated revenue by 15.8 percent to EUR 2.027 billion in the first nine months of 2024. Adjusted EBITDA grows by 12.1 percent to EUR 322.7 million in the same period. The company's management is sticking to its forecast and expects a significantly higher Adjusted EBITDA for the full year compared to the previous year.
• CTS Eventim records a 22.9 percent increase in revenue to EUR 564.6 million in the Ticketing segment and a 13.6 percent increase to EUR 1.494 billion in the Live Entertainment segment. The company is also awarded the contract for the construction and operation of a new large arena by Wien Holding.

Friday: Stock market dates, economic data, quarterly figures

ex-dividend of individual stocks

Schloss Wachenheim EUR 0.60

Cummins Inc. USD 1.82

CRH 0.35 GBP

Quarterly figures / company dates Europe

No time specified: Vinci Investor Day | Unilever Capital Markets Day

Economic data

• 08:00 DE: GDP (2nd release) 3Q calendar and seasonally adjusted yoy FORECAST: +0.2% yoy 1st release: +0.2% yoy 2nd quarter: -0.3% yoy calendar-adjusted yoy FORECAST: -0.2% yoy 1st release: -0.2% yoy 2nd quarter: -0.3% yoy
• 09:15 FR: Purchasing Managers' Index/PMI non-manufacturing (1st release) November FORECAST: 49.0 PREV: 49.2 Total Purchasing Managers' Index (1st release) FORECAST: 48.1 PREV: 48.1
• 09:15 FR: Purchasing Managers' Index/PMI manufacturing (1st release) November FORECAST: 44.0 PREVIOUS: 44.5
• 09:30 DE: Purchasing Managers' Index/PMI non-manufacturing (1st release) November PROGNOSE: 51.8 PREVIOUS: 51.6 Total Purchasing Managers' Index (1st release) PROGNOSE: 48.3 PREVIOUS: 48.6
• 09:30 DE: Purchasing Managers' Index/PMI manufacturing (1st release) November FORECAST: 43.0 PREVIOUS: 43.0
• 10:00 EU: Purchasing Managers' Index/PMI non-manufacturing Eurozone (1st release) November FORECAST: 51.5 previously: 51.6
• 10:00 EU: Purchasing Managers' Index/PMI manufacturing Eurozone (1st release) November PROGNOSE: 46.0 PREVIOUS: 46.0 Total Purchasing Managers' Index (1st release) PROGNOSE: 49.8 PREVIOUS: 50.0
• 10:30 UK: Purchasing Managers' Index/PMI non-manufacturing (1st release) November FORECAST: 52.0 PREVIOUS: 52.0
• 10:30 UK: Purchasing Managers' Index/PMI Manufacturing (1st release) November FORECAST: 50.0 PREVIOUS: 49.9
• 15:45 US: Purchasing Managers' Index/PMI Services (1st release) November FORECAST: 55.0 PREVIOUS: 55.0
• 15:45 US: Purchasing Managers' Index/PMI Manufacturing (1st release) November FORECAST: 48.8 PREVIOUS: 48.5
• 16:00 US: Consumer Sentiment Index Uni Michigan (2nd survey) November FORECAST: 73.5 1st survey: 73.0 previous: 70.5

Unfortunately too little invested. :-)