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Disclaimer: I'm not a financial advisor nor is this financial advice, make your own decisions. Data from PLTR's latest 10-K & 10-Q.
Position: long shares of stock @ $24.67 and have over doubled my position since Mar-21
TL;DR – still bullish on PLTR and buying shares on down days. Financials improving each quarter. Waiting for the breakout.
My analysis primarily focuses on the financials of PLTR AFTER stripping out the Stock Based Compensation (SBC). For more background on this check my last post about it, but basically, I don’t believe the market should be putting so much weight on this when analyzing the financial health of the company: . Also, the fact that PLTR is allowed to present financial data in their 10-K & 10-Q filings after stripping out SBC shows that this is how the company should be analyzed. See previous post for more info on that: https://www.reddit.com/r/StockMarket/comments/lygxog/why_pltr_is_still_a_growth_tech_stock_you_still/
Actuals = true GAAP results
Adjusted = financials after stripping out SBC
Anyways, here are the numbers and keep in mind that Q3-20 experienced abnormally high costs from when PLTR went public:
Revenue, COGS, Gross profit are all improving minus Q3-20 when the company experienced a significant amount of non-recurring costs due to its IPO. Revenue growth is still strong QoQ at 10.1% and 49% since Q2-20.
EBITDA is looking quite strong as this is now the 6th straight quarter of positive EBITDA. Additionally, EBITDA as a % of Revenue continues to grow which shows the company’ ability to grow profitability as they scale.
On an adjusted basis, Revenue and Gross Profit continues to expand while SG&A costs have remained constant:
To expand upon the adjusted costs of the company, PLTR is proving it is on the right track toward sustained profitability as their operating costs have remained constant while simultaneously expanding revenue and gross profit. This also means that the company is continuing to prove profitability as the costs as a % of revenue are trending lower and lower each period:
Lastly, EPS on an adjusted basis has been positive for the past 3 quarters:
Quick Balance Sheet Look:
This was the first Quarter that PLTR has reported $0 debt and have $2.3B in cash – quite impressive for a growth stock. Additionally, their current ratio and d/e ratios show no signs of liquidity/solvency issues (as expected).
In Summary: These posts don't generally focus on the qualitatives, but I have read almost nearly only great news about this company in the past 6 months yet the stock continues to get beaten down. The stock appears to be mainly being hurt due to 1) inflation fears, 2) differing opinions on valuation, and 3) stock based compensation criticism. However, none of these factors have an impact on the CORE operations of PLTR which I believe to be are extremely strong and all trending on the correct path. If long term investors can stay strong and continue to buy into this weakness, I think they will be happy they did so in 2-5 years’ time. I will be curious to see if PLTR can break out of the 27.50 resistance or if it will fail that level and retest the low 20s again.