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Palantir- Falling Margin and Slowing Revenue Growth
By Investmoolah  •  August 15, 2022
In my previous article, I had indicated Palantir was a stock worth $18 at a valuation of (i) 30% revenue growth, 27% margin and 10% risk free rate. However, based on the past two quarters of financial results, Palantir's growth story is not true and margin is decreasing in a bad way. This is due to the company paying its employees a large salary which is faster than growth. Palantir has to control its margin because it is destroying the valuation of the company. No Longer: 30% growth, 27% margin, 0.48 EPS in 2025 Palantir has guided for 27% revenue growth and operating at 23% margin. This kills off future profitability. I am now guiding for a more pessimistic 20% revenue growth with a 17% margin.  This means expected EPS is now 0.24 in 2025. Maintaining long term growth, a 50 times P/E is still applied with 10% risk free discount rate and this points to a $9.12 fair present value...
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By Investmoolah
A total otaku who loves anime, investing and the occasional K-drama. My financial journey begun at the age of 22 and has revolved around the concepts of "Working Hard", "Saving Well" and "Investing Wisely". Through my journey, I have realized that financial literacy is something we have learnt little during our school days but is one of the most useful and relevant skill that we have to be equipped to take on the real world. Concepts such as compounding and "common sense investing" are skills that will place us ahead of the race to retirement ...
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