Quote (ofthevoid @ Mar 26 2021 09:05pm)
I owned it at 10 briefly but sold out.
Personally, I think it's overpriced, at a time when valuations on high flyers are really taking a tumble.
Palantir has a price/sales of 37 while Microsoft has a p/s of 11. So Palantir is over 3x the price of Microsoft a company that many would say is at a rich valuation.
Secondly, PLTR has a fairly low customer base. They only have 125 customers and many of their analytics offerings take time to implement and are highly customizable. That's not good for economies of scale. As a company, you want to be able to churn products out in fairly standardized packages. Customization = more input costs.
Thirdly, the company has never been profitable in 18 years of existence. It has never been FCF positive. Its operating profit was negative 1.2 billion dollars and its EPS is -1.20/share most recently.
Fourthly, big data analytics is an up-and-coming field but it's a very crowded space. Extremely competitive and you have some heavyweights in there and competitors springing out of the woodwork daily.
Fifthly, insiders have sold a fuckton of stock in the last few months. That doesn't instill confidence IMO.
Personally, if I was you I would diversify. I don't have a crystal ball, it's possible this goes to 30 or 40 but you should spread your eggs out.
I don't think P/S is necessarily a good metric for growth companies.
Low customer base is indeed an issue. Their value in the future will be highly dependent on getting more customers.
Most of their existence has been developing the software, so taking the full 18 years of existence isn't necessarily a good indicator. However, it is currently far from profitable, that's a given.
Big data analytics could easily be overtaken by massive investment by other companies, agreed.
Insiders selling stock in the last few months isn't concerning when you see that most of their compensation for the past 10+ years has been stock options, and they've only been allowed to sell since February 15th. Under those circumstances it's expected to have a huge amount of insider sales immediately following.