Source: Beast Finance Author: Beast Finance
In this article, Boldbeast Finance will conduct a comprehensive and in-depth analysis of Palantir through its key stock indicators, business model, profitability, and key positive factors affecting Palantir's stock price in 2023.
Key Indicators for Palantir Stock
Since Palantir (PLTR)'s stock price rose sharply to $35.18 on January 25, 2021, its stock price has begun to fall, and fell to $5.84 at the end of 2022, a drop of more than 83.4%.
By 2023, Palantir's stock price has risen by 28.33%, and Palantir's stock price has also risen by 2.24% in the past month.
Palantir is a company we are very optimistic about, and we bought its stock when it went public, when its stock price rose, and when its stock price fell.
While we can't predict what Palantir's stock price will be one month or one year from now, given the time horizon (5-10 years) we intend to invest in Palantir stock, we believe that Palantir's stock price will be in line with Salesforce's (CRM) stock price in the future.
As a public company, it took Salesforce 12 long years to reach $80 per share, and nearly six years to reach $20 per share.
Beast Finance believes that the weaker the macro economy, the better for companies like Palantir, because in the current environment, more and more companies want to do more with less money, and through Technology to improve efficiency, so as to achieve the purpose of reducing capital expenditure.
Palantir currently has no debt, has more than $2 billion in cash on its books, and has ample free cash flow, which means that even in an environment of rising interest rates, it will not affect its daily operations.
Beast Finance believes that high-quality companies like Palantir still have strong growth opportunities in the future, and Palantir's current stock price is also very attractive. We believe that 2023 will be an excellent opportunity to invest in Palantir stocks.
Palantir's business model is proven and tested in a weak economy
According to the latest report of the Federal Reserve, the market generally believes that the Fed's terminal interest rate will reach 5.1%, and will raise interest rates by 25 basis points. The Fed report suggests rates will fall to around 4.1% in 2024 and then to around 3% in 2025. Longer term, the Fed expects rates to eventually fall back to a range of 2-2.5%. In his speech, Powell specifically stated that the Fed does not expect to cut interest rates in 2023 and has a firm stance.
Boldbeast Finance believes that rising interest rates will only make it harder for companies. The main reasons are as follows: Due to the slowdown in economic activities that reduces market demand for corporate goods or services, corporate income may be affected. Companies that need to obtain funds will also face higher borrowing costs, and if the company has debts that need to be restructured, the cost of refinancing will also be higher. If a business has floating-rate or floating-rate debt, then in a rising interest rate environment, the business's operating costs will also increase as the floating rate fluctuates upwards as the federal funds rate rises.
Palantir's current balance sheet is very healthy and will not be affected by the current economic environment. Palantir currently has $2.6 billion in cash on its balance sheet, plus $16.24 million in restricted cash and $35.14 million in marketable securities. Palantir is also free cash flow positive and will generate a net profit in the fourth quarter of 2022. From an operational standpoint, the current economic environment has not had an impact on Palantir's day-to-day operations.
The reason we say Palantir's business model is proven and tested in a soft macro environment is because when the going gets tough, companies pay extra attention to efficiency and spend every penny It's all spent wisely. Palantir's software meets the needs of these companies. The fact that more and more large companies have begun to use Palantir's products is the best verification.
While Palantir works with the U.S. government and is one of three companies to receive Impact Level 6 (IL6) authorization from the Defense Information Systems Agency (DISA), it is not a "spy" company.
At Palantir's Foundry Con conference, companies including Morgan Stanley (MS), BP, and Tyson Foods all recognized the value that Palantir's software brought to their companies.
Tyson Foods CTO Scott Spradley said Palantir's software has saved us more than $200 million. John Rickerman, the general manager of Jacobs, said that Palantir's software has saved us 20% of the cost, and saved us $300,000 at one site. In the future, we will deploy Palantir software at 300 sites at the same time. In order to save more costs. BP also extended its partnership with Palantir by five years, at a price said to be in the nine figures.
In 2022, Palantir's U.S. revenue will increase by 32% year-over-year to $1.16 billion, commercial revenue will increase by 67% year-on-year to $335 million, and government revenue will increase by 22% year-on-year to $826 million.
So, Palantir is no longer a company that only deals with government agencies.
Palantir can not only develop well in economic prosperity, but also thrive in economic difficulties, because in economic difficulties, efficiency becomes more and more important for enterprises and governments, and enterprises and governments are looking for such cooperation partners, and Palantir can meet their needs and bring them value.
Therefore, the number of Palantir's customers is increasing every quarter. That's why Palantir was able to generate 55 contracts worth at least $1 million in the fourth quarter of 2022, including 11 contracts worth more than $5 million and five contracts worth more than $10 million.
Key positives for Palantir's share price in 2023
So far (the first quarter of 2023), there have been some positive factors affecting Palantir's share price. Palantir recently announced that the Australian Transaction Reports and Analysis Center (AUSTRAC) has renewed a contract with them, and Palantir will continue to trade for Australia. The Reporting and Analysis Center provides an intelligence data analysis platform to protect Australia's financial system from criminals.
Palantir announced in the first quarter of 2023 that it has signed a five-year contract worth more than US$50 million with Japan's SOMPO Holding Company, which will greatly improve the work efficiency of more than 10,000 sales staff of Japan's SOMPO Holding Company.
In the U.S., the U.S. federal government has designated Palantir as a provider of data management and data decision-making services for the U.S. Medical Service. The contract is for a period of five years and is worth more than $99.6 million.
Palantir's software will build a new enterprise data management platform for the U.S. Department of Health Services called Project Axiom, and the contract builds on Palantir's ongoing work with the U.S. federal government in the areas of global health and medicine.
Palantir also renewed its contract with its multi-year partner Cleveland Clinic in the first quarter of 2023, which will provide Cleveland Clinic with a virtual command center, which further strengthens Palantir's position in the healthcare field.
By signing contracts with the above companies and government agencies, not only does Palantir have a very good start in 2023, but the prospect of cooperation between Palantir and the British National Health Service System (NHS England) in 2023 is also very optimistic.
The British National Health Service has previously launched the bidding process for the procurement of the data platform. The contract is expected to last for 5 years and is worth 360 million pounds. After the contract expires, there will be two 12-month renewal options worth more than 120 million pounds. .
Palantir has already partnered with the UK's National Health Service on its COVID-19 vaccination programme, personal protective equipment supply chain and waitlist management.
In the COVID-19 vaccination program, Palantir manages 2,900 sites, serving more than 771,000 people daily. In the supply chain of personal protective equipment, 1,300 companies have already used Palantir’s Foundry products, and Palantir has already cooperated with the UK The NHS allocated and distributed more than 6.9 billion items. The Chelsea and Westminster Hospital Foundation also reduced the number of waiting times by 28% by using Palantir's Foundry data verification and management functions.
Beast Finance believes that the cooperation with the UK National Health Service System will be a crucial deal for Palantir, because the UK National Health Service System is one of the largest nationalized medical service institutions in the world, accounting for about 6,500 Thousands of people provide medical services. Palantir has also been building a UK team, where in addition to hiring Harjeet Dhaliwal, the former head of artificial intelligence at the NHS, Palantir also hired Harjeet Dhaliwal, former deputy director of data services at the NHS.
Although there is still uncertainty about whether Palantir can win the tender contract of the NHS, Julian Kelly, Chief Financial Officer of the UK Department of Health Services, recently asked the NHS to upload patient information to a new NHS by the end of March. Central database, which is built using Palantir's Foundry software.
Beast Finance predicts that Palantir is likely to win the contract of the British National Health Service System in 2023, and it will also have a profound impact on the British healthcare industry.
Prior to this, Palantir has been working with the domestic healthcare system in the United States, and was recently selected by the US federal government as a data management platform provider for the US Department of Health Services.
Palantir also has a good relationship with the NHS. The cooperation with the NHS and the expansion of the team in the UK will further widen the gap between Palantir and its competitors, and will also create a greater relationship with the NHS. Synergy.
If Palantir wins the UK's NHS tender in 2023, it will not only boost Palantir's revenue and profits, but will also strengthen its relationship with US allied governments and generate positive momentum for its healthcare expansion across the EU. chain reaction.
Once Palantir's software is used by the UK's NHS, it is unlikely to replace Palantir's software in terms of review, funding allocation and resources.
Winning a contract of this size will also change and allow Palantir's revenue to grow significantly over the next few years.
in conclusion
Palantir stock, while it has started to bounce off its lows, is still nowhere near where it used to be.
Boldbeast Finance believes that Palantir still has huge growth potential in the future.
Because its business model has been proven, it has withstood the test in the weak macroeconomic period, its balance sheet is also very healthy, and its solutions can improve the efficiency of the enterprise and enable the enterprise to generate income.
Palantir continues to sign contracts with a large number of companies and says it will achieve GAAP profitability in fiscal 2023. If Palantir wins the NHS tender in 2023, analysts could upgrade Palantir's financial forecast rating, with positive knock-on effects for Palantir's expansion across the EU and increased government contracts.