3 Key Metrics to Assess Palantir Stock Value
Palantir Technologies is a leader in artificial intelligence and data mining, captivating investors’ interests. However, its stock valuation raises concerns. Currently, Palantir’s stock trades at an astonishing 226 times earnings and 83 times sales. This remarkable valuation has made some investors cautious, yet several financial metrics suggest reasons behind this assessment.
Key Metrics to Assess Palantir Stock Value
1. U.S. Commercial Revenue
Palantir initially designed its services for U.S. intelligence and law enforcement. Today, it serves enterprise businesses aiming to make informed, data-driven decisions. In the latest quarter, Palantir’s U.S. commercial revenue reached $507 million, representing a 137% increase year over year and a 28% rise quarter over quarter. This growth trend has persisted, marking the seventh consecutive quarter of accelerating revenue growth with two quarters exceeding 100% growth.
2. Remaining Performance Obligation (RPO)
The concept of Remaining Performance Obligation (RPO) provides insight into Palantir’s future revenue potential. As their contracts may span multiple quarters or even years, RPO assesses the revenue that has been contractually assured but not yet recognized. In the fourth quarter, Palantir’s RPO soared to $4.21 billion, reflecting a 143% increase year over year. Notably, this includes $1.62 billion expected to be recognized in the coming year.
3. Total Contract Value
Another metric to consider is Total Contract Value (TCV). In the latest quarter, Palantir secured 180 deals worth at least $1 million. Among these, 84 exceeded $5 million, and 61 surpassed $10 million. These figures highlight a significant increase compared to the same period last year, where only 129 deals were closed for at least $1 million. The record TCV of $4.26 billion marks a 138% year-over-year increase.
Current Stock Performance
| Data Point | Value |
|---|---|
| Current Price | $139.57 |
| Market Cap | $333 billion |
| Day’s Range | $137.78 – $145.54 |
| 52 Week Range | $66.12 – $207.52 |
| Volume | 20,000 |
| Average Volume | 45 million |
| Gross Margin | 82.37% |
Investment Considerations
Investors face the challenge of balancing AI implementation with attractive returns. Palantir’s Artificial Intelligence Platform (AIP) provides a solution by integrating with current business systems. This platform helps companies harness actionable insights to solve challenges efficiently. Additionally, Palantir offers boot camps where executives collaborate with its engineers to develop effective AI solutions.
Palantir remains a unique investment opportunity, though its high valuation and volatility may deter some investors. For those willing to embrace a long-term perspective, Palantir might deliver substantial rewards. As an investor, I remain confident in Palantir’s potential.
