Palantir Stock: Buy or Sell (My Final Verdict) | PLTR Stock Deep Dive Part 3
Summary
Parkev analyzes Palantir's impressive ability to generate massive revenue from a relatively small but high-value customer base. Parkev notes that the US commercial customer count grew by 35% to 653, while overall revenue growth outpaced customer acquisition, indicating that existing clients are significantly increasing their spending. Parkev highlights the net dollar retention ratio of 157% as a key indicator of a superior customer value proposition, which is leading to larger, long-term contracts and a total remaining deal value of $13.1 billion.
Financially, Parkev is highly impressed by Palantir's 47% operating margin, which Parkev notes is currently better than Microsoft's. With $9.2 billion in cash and no debt, the company is in a robust position, although as a defense contractor, the company is currently restricted from share buybacks. Parkev suggests the company could instead focus on acquisitions or benefit from interest income on government bonds. Parkev concludes that while the stock trades at a forward P/E of 70, the growth rate and backlog justify this valuation.
Mentioned Stocks
Reasoning: Parkev maintains a positive outlook on Palantir due to the surging operating margins of 47% and exceptional net dollar retention of 157%. Parkev emphasizes that the intrinsic value of the business is growing faster than the share price, leading to a revised fair value estimate of $193 per share against a market price of $158. Parkev believes the stock is undervalued at a forward P/E of 70 given revenue growth near 93% and a massive backlog of over $12 billion in deals. Parkev previously identified everything below $110 as a great entry point and continues to view the current price as attractive.