The Explosive Result of Palatir Stock [PLTR].

palantir also reported uh they they were

profitable in the quarter and that's

because of a big boost in other income

which I thought was quite interesting

but uh otherwise they're actually

growing quite well uh they're at a 22

operating margin they uh they did come

in a little bit soft on the guidance for

2023 2.205 billion versus the 2.28

expected still though free cash flow

sitting at 75.8 mil in the fourth

quarter they're uh they're coming in

with an expectation of uh revenue of

508.6 versus 505 and rev uh you know

okay let's take a look here at uh a

brief just a brief moment here into uh

their investor relation sheet commercial

Revenue actually growing more than

government rent Revenue growing it's

actually one of the big things that you

want to see continue at palantir you get

a little bit more transparency with that

commercial Revenue than you do that

government revenue uh and you can see

here that overall company Revenue growth

about 17.5 percent margin slightly

weaker on cost of Revenue but basically

stable compared to

2021 coming in at 20.5 percent and they

did have a loss from operations but they

had that boost there of about 44 mil

from other income however this is now

getting a lot of folks excited that

penalty are now officially will no

longer be deemed profitless Tech and

instead could be deemed profitable of

attack which has a lot of people very

very excited uh palantir has obviously

been something that's been heavily

covered especially on social media and

so the fact that now uh you've you've

gone to a positive net income compared

to a very long period of losses it has

folks very very excited now something

that we can do quickly is just try to

understand the valuation usually we do

stuff like this on a daily basis in fact

we actually go substantially deeper into

fundamental analysis in the course

member live streams remember we've got

the flash sale going on linked down

below it is a 69 off a flash sale for

Valentine's Day at Valentine's Day but

anyway coming in at uh an expected an

expected 19 cents of earnings for 2023

and a stock that is currently in

pre-market up 18 at nine dollars you're

looking at a stock that currently is

trading for about 47 times it's uh its

earnings sitting at about a twenty

percent growth on a revenue which is not

how you're supposed to calculate Peg but

that would put you closer to about two

and a half times Peg if that were to

translate directly to EPS you'd be about

two and a half times Peg however if we

expect that growth to be somewhere

around it looks like wall Street's

thinking about closer to 24 25 you're

actually sitting at closer to about 1.9

times PEG ratio so as long as they stay

profitable it's actually not too

horrible uh of a multiple so that gives

us a little bit of intel on palantir so

congrats to those of you uh investing in

that pound here and looking at for

palantir let's say other important

things obviously to pay attention to for

palantir is hey what what how

sustainable is some of this other income

do we even need it on the basis of

projections to keep going uh and uh to

just stay profitable going forward you

can also jump over and look at their

assets you've got assets right now

sitting here look at this cash folks 2.6

billion dollars of cash sitting around

at palantir I mean that's phenomenal

that that already gives you plenty of

buffer but that you know talking buffer

implies that you're actually spending

cash right well we can go to the cash

flow statement I love me some cash flows

and even though they had an operating

loss their net cash provided by

operating activities because of the

software as a service business a

business that basically takes eighty

percent of their revenue to gross uh

profit which is really really incredible

what you end up having is you have net

cash provided by operating activities

here of around 223 million dollars so

you've got this company pound here

that's actually printing cash from

operations really really good uh in fact

the reason you have close to a loss is

because the stock based comp for the

year ended in 2022 here was

564 million dollars that obviously comes

off of the share uh or it's basically

shared dilution so if you're in an

investor in the shares it dilutes you

but it doesn't actually affect the cash

position of the company so why companies

love that if you look at free cash flow

for the year you can just subtract PPE

here that's plant property and Equipment

you've got over 180 million dollars of

cash flow for the year of 2022 which

really absolutely incredible and the

expectation is that cash flow is going

to continue so really you have the

opportunity here to increase your cash

without taking on more debt uh I don't

actually let me see let's see how much

debt they actually have we got some

payables and current liabilities here

quick math that's about 210 mil I'm not

going to count deferred rev or cost

deposits or lease liabilities so you've

really only got about 210 million

dollars in current liabilities here if

we look at

non-occurrent liabilities you've got

maybe another 12 million dollars holy

smokes the capitalization structure of

this company is actually extremely good

I mean you're looking at under 100 and

what 30 120 ish call it look call it

less than 150 million dollars of actual

current liabilities that aren't like

customer deposits or deferred revenue uh

you've got cash just straight up cash

sitting around of almost 2.6 billion

dollars uh on top of that you got some

marketables over here who cares so call

it 2.6 billion dollars of cash in the

bank Ola uh versus uh maybe only about

140 million dollars of current

liabilities like bills to pay holy

smokes this is really well capitalized I

mean you have 18.5 times as much cash as

you actually have current expenses and I

think the big reason here for that is is

the company is basically paying everyone

in Stockholm uh it's phenomenal how much

money they spend in in stock comp I mean

look at this their sales and marketing

expenses are sitting at about 700 bill

here total up Opex for a moment with me

go down this journey with me look at

total Opex you're sitting at 1.65

million dollars for uh the year end 2022

right we'll go over now to stock based

comp for the year end you're looking at

30 percent of all of their operating

expenses just going straight out of the

shares rather than cash and that's

letting them build up this cash War

chest which does you know doesn't really

matter what they do as long as you

believe in the leadership uh there uh

you know you would expect that cash

could be deployed well especially in the

SAS Biz and really you know a lot of

companies that have this much cash what

they end up doing is they end up blowing

it all on uh sales and marketing in

other words they just can't help

themselves so they spend everything on

sales and marketing to prop everything

up uh as as extremely as they can uh

during the good times and that could be

really dangerous because then they don't

have any cash saved up for the bad times

but look at this company this this is

almost all you really need to know to

see that this company is actually and

I'm not invested in this company but it

actually goes to show you they're being

very conservative here they grew their

sale sales and marketing expenses at

just 17 percent whereas uh look at that

their revenue grew at 17.5 percent you

grew Revenue more than you grew sales

marketing that's a number one criteria

right here this is great this would be

concerning if the company here plowed

all of a sudden you know 50 to 100 sales

and marketing growth into sales and

marketing it only grew Revenue at 17.5

right but the fact that they're roughly

matched here is phenomenal and then look

at this they actually cut spending on

research and Dev and GNA showing they're

working on their operating leverage

they're operating efficiency I said look

you know what this is this is pretty

impressive I have to say you know prop

props to palantir here uh this is a very

very impressive statement I mean even if

you take out their other income uh of

this 44 million dollars of uh question

mark money over here even if you take

this out uh 17.8 million dollars of a

loss for a company that has 2.6 in the

bank that's a joke in other words it's

really really good

you can't poop on this company

especially not with nearly an 80 gross

margin over here and operating leverage

that's actually increasing this is this

is a very impressive report I mean this

is a company that honestly it deserves

to be up 18 maybe even more because uh

wow congratulations that's all I can say

for palantir that's great now what we

might do when the course member

livestream is go through the earnings

call and get a little bit more color in

terms of what the executive staff is

thinking for the company uh going

forward and uh how uh how much are we

growing that commercial side of the

business I'm a big fan of seeing growth

in the commercial side of the business

for palantir uh they've also obviously

got the buzzword of AI but it's more

than just a buzzword for palantir really

with palantir you actually do have uh

the basis of what they do the software

they provide

is artificial intelligence I mean it's

your really originally it's been

considered your government version of

snowflake obviously they're different

but they've got similarities in that

let's give you a lot of data and you

start making connections whether that's

on uh you know uh their Gotham business

uh uh for for Public Safety and public

security but think about just the idea

about police forces uh it's also kind of

scary police forces for example loading

just all of their big data in and then

getting reports back that say things

like hey you know

the AI thinks we might need an officer

on 32nd and Broad today and then all of

a sudden they prevent crime because the

AI suggests hey we might need someone

here because crime is statistically

increasingly likely to happen in this

particular area today it's phenomenal

and I'm just scratching the surface of

really what this kind of software can do

uh honestly my explanation is is like

oversimplified it's like a five-year-old

example of of what this stuff can do but

now multiply that by the entire

government the CIA the FBI police forces

across the United States kind of scary

what the stuff can do but it's also

really incredible from a logistics point

of view what these folks can do for

commercial Enterprises uh shipping

Logistics I mean there it's it's scary

but uh you know then again we're going

into a big data in world of AI so and

somehow they figured out how to make it

wildly profitable with a whole lot a

whole lot of cashola so look even though

I'm not in it I have to say this looks

pretty sexy and

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