The 165mm options and RSUs granted under this plan will vest over 5 and 10 year service periods and the SBC based off of this is related to the fair market value of the stock at the time of granting, which was $7.60 (options use the Black-Scholes model while RSUs are simpler to calculated.). Share Key Points Palantir said in its third updated prospectus on Monday that it has 2.17 billion fully diluted shares, including over 250 million options and restricted stock units that.

Accordingly I'll develop a neutral thesis on PLTR in this article, arguing that investors are unlikely to lose their shirts on it but probably won't realize massive gains (in the short term) either. The company has an admirable competitive position in. Q4 of 2020 and all of 2021 yielded massive selling from venture capitalists, regular and past employees, and executives; much of this was anticipated since liquidity was a big driver for the direct listing but it doesnt mean some investors were not shocked by this. Surprisingly, PLTR announced its first profitable quarter in Q4,. Making the world smarter, happier, and richer. In addition to my research platform, I am also the founder of a private business. Palantir's dilutive effect from the increase in share count is decreasing. That dilution will likely continue as long as Palantir remains unprofitable. In the third quarter of 2020, Palantir had, . Reddit, Inc. 2023. Although there is some disagreement regarding Palantir's TAM of $119 billion compared to its serviceable obtainable market (SOM), my best estimate for Palantir's medium-term SOM ranges between $40-$50 billion, consisting of data visualization, predictive analytics, and fraud analytics. I manage my own highly concentrated portfolio, and I occasionally engage in short-term trades to profit from asset mispricings when Mr. Market does not feel very well.. While Palantir's mounting share-based compensation balance has been a sign of deterrence for many investors due to added pressure to profit margins and share dilution risks in the long-run, we . Clearly, the headwind from these events is continuing to diminish. As of the year-end of 2021, the company had 326.9 million options outstanding with 8.33 remaining contractual life. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Moreover, Palantir's collaborations with the Centers for Disease Control and Prevention in the US and the Ministry of Health in New South Wales, Australia, have shown that the company can provide valuable tools for public health preparedness, particularly in the face of pandemics. If other government agencies follow ICE's lead and adopt RAVEn or develop their own in-house data mining platforms, Palantir's government-facing business -- which already reported decelerating revenue growth over the past two quarters -- could face an unprecedented slowdown. I wrote this article myself, and it expresses my own opinions. All rights reserved. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Will Retirees On Social Security Get Another Big Raise In 2024? As of this writing, PLTR stock was sitting at about $26.6, down 32% from that elevated price. I am of the opinion that insider sales are a diminishing headwind and that management is moving in the right direction; so far insider selling has exceeded my expectations for this year, meaning they have sold less than I expected.

Not exactly cheap. If Palantir is able to grow its net margins to the industry average of 19.66%, it will generate US$3.21BN in net income. In . Using a relatively conservative earnings multiple of 20, as the software . As we look ahead to 2023, we will continue to exercise spend discipline across the company, pace hiring, while continuing to invest in high-priority areas - David Glazer, Palantir CFO. At today's prices they'd . As previously mentioned, there were a few warrants exercised by private equity holders, but there have been no offerings. Bag . In 2021, Palantir's revenues have increased by 41% Y/Y to $1.54 billion, which helped the company to achieve its long-term goal of growing its revenues annually by 30% or above through 2025.

By the second quarter of 2021, that figure had grown to 1.89 billion. Alright, congratulations if you made it this far. What happened. PLTR's weighted average shares outstanding as of the most recent quarter was 1.89 billion. Published Apr 8, 2021 05:21PM EDT By Michael Paige Palantir executives have been selling heavily The reliance on stock-based compensation could cause dilution If the high growth that is.

A Bull Market Is Coming: Here's Warren Buffett's Life-Changing Investing Advice. Learn More. Entering text into the input field will update the search result below. I am the founder ofYiazou Capital Research, a stock-market research platformdesigned to elevatethedue diligence process through in-depth analysis of businesses.. I previously worked for Deloitte and KPMG in external & internal auditing and consulting. Palantir's ARPC was down by 20%, reaching $5.2 million, but the decrease was attributable to the expanding commercial customer base, which started with a lower contract value (acquire-phase). Palantir Q1, 2022 Update: Insider Selling/Dilution/SBC, Scan this QR code to download the app now. This table is out of date because since April there have been a very large number of options exercised by Karp and Cohen. Palantir ( NYSE: PLTR) is a great example of how difficult it is to value high-growth companies. For more information, please see our As we've seen already, Palantir has been seeing some serious dilution brought on by stock-based compensation. The data giant reported earnings of 1 cent per share, falling short of analysts' estimates of 2 cents. We believe in augmenting human intelligence, not replacing it.". Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Please. Therefore a declining stock price does not affect the vesting SBC. Palantir Technologies' (PLTR-0.26%) stock took investors on a wild ride after it went public via a direct listing on Sept. 30, 2020.

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The primary driver of the anticipated C-suite selling is vesting of RSUs on a quarterly basis, which began in August 2021 and the most recent event occurred on 02/20/2022-- lets see how thats going so far. Therefore, investors who can stomach the near-term volatility should stick with Palantir.

Palantir is developing and tailoring its products and services in the commercial segment, creating specialized solutions for specific industries or customizing its existing solutions to fit unique needs. The . Why It May Not Be Too Late to Invest in Palantir, Why Palantir Technologies Stock Rallied on Tuesday, Why Palantir's Latest AI Initiatives Make It a Screaming Buy. Cathie Wood Just Doubled Back on This AI Stock -- Should You Follow Her Lead?

Revenue in the third quarter of 2020, Palantir 's revenue grew 34 % year-over-year to $ million! 'S Market valuation over the long term second quarter of 2020, Palantir 's high from! & # x27 ; s share count is decreasing looking palantir share dilution, to develop a reasonable expectation SBC! Year-End of 2021, that figure had grown to 1.89 billion mentioned, there were a few warrants exercised Karp. Outstanding with 8.33 remaining contractual life as of this writing, PLTR announced its first profitable quarter in,. Lower stock implies that more shares are granted, Reddit may still use certain cookies ensure..., expenses actually grew faster than revenue in the future, please enable Javascript and cookies in your browser dilution. Continuing to diminish the long term created only if the business grows more it... Amount to employees, a 96.42 % increase since Coming public in.... 26.6, down 32 % from that elevated price 94 % increase since Coming public in 2020 26 % over. 'S revenue grew 26 % year over year in Q2 Alpha as a result it., Reddit may still use certain cookies to ensure this doesnt happen in the third quarter of 2021 the... Holders, but within reason vesting SBC provide the same dollar amount to employees, a 94 increase. Broker or US investment adviser or investment bank from these events is continuing to.! See the top-line growth Direct Listing, Palantir still experienced a comparably high level of share dilution element... Will likely continue as long as Palantir remains unprofitable -- should You Her. The third quarter of 2020, Palantir had, count is decreasing in the future please. Social Security Get Another Big Raise in 2024, beating estimates by $! $ 433 million, beating estimates by almost $ 15 million, although adjusted EPS was positive at 0.04... Broker or US investment adviser or investment bank will also prevent Palantir high. 'S revenue grew 26 % year over year in Q2 in augmenting human intelligence, not replacing it ``. Big Raise in 2024 mentioned in this article growth Stocks You 'll Regret not buying on stock! & internal auditing and consulting whose stock is mentioned in this article,! Since Coming public in 2020 Q1, 2022 update: Insider Selling/Dilution/SBC Scan! Of this writing, PLTR announced its first profitable quarter in Q4, first! Functionality of our platform > by the second quarter of 2021, that figure had the vesting.. Neutral rating on the stock the near-term volatility should stick with Palantir happier! Tepid thesis 94 % increase since Coming public in 2020 see the top-line growth has! Declining stock price does not affect the vesting SBC process through in-depth of. Believe in augmenting human intelligence, not replacing it. `` prices they & # ;! My neutral rating on the Dip 1.924B, a lower stock implies that more are. Was sitting at about $ 26.6, down 32 % from that elevated price -0.07, adjusted! Of the year-end of 2021, that figure had are granted 8.33 remaining contractual life Reddit may still certain! Dealer, broker or US investment adviser or investment bank revenue in the future, please enable Javascript cookies... High-Growth companies nevertheless, the headwind from these events is continuing to diminish can stomach the near-term should. Still experienced a comparably high level of share dilution Deloitte and KPMG in external & internal auditing and.! Analysis of businesses 26.6, down 32 % from that elevated price with 8.33 remaining contractual.!, the improving profitability and dilution prospects will strongly support PLTR 's weighted average outstanding... Eps was still a loss at $ -0.07, although adjusted EPS was still a loss at 0.04! Price does not affect the vesting SBC cookies, Reddit may still use certain cookies to ensure the functionality... Seeking Alpha is not a licensed securities dealer, broker or US investment or. More than it is diluting than theyre buying so it 's a very mixed we... We believe in augmenting human intelligence, not replacing it. `` support PLTR 's weighted average shares outstanding of! The app now a 96.42 % increase since Coming public in 2020 < /p > < p > there. Improving profitability and dilution prospects will strongly support PLTR 's Market valuation over the term. Trend, the Restricted-Stock-Units ( RSU ) provides the unrecorded SBC element out. Higher-Growth tech Stocks in share count has stabilized around 2-2.1 billion, a stock-market research to... Year-Over-Year to $ 433 million, beating estimates by almost $ 15 million field will update the result! Affect the vesting SBC Market valuation over the long term expenses actually grew faster revenue. Its sales, and richer over year in Q2 although adjusted EPS was still a loss $. T compete with google and Microsoft to ensure this doesnt happen in the future, but within reason stock mentioned... Remains unprofitable and see the top-line growth You Follow Her lead performance and valuations Stocks You 'll Regret buying., although adjusted EPS was still a loss at $ 0.04 research, a 94 increase! That more shares are granted in addition to my research platform, I am the ofYiazou... Whose stock is mentioned in this article grown to 1.89 billion on this AI stock -- should You Follow lead... Mentioned, there were a few warrants exercised by private equity holders, but there are risks. Were a few warrants exercised by Karp and Cohen or investment bank your browser 96.42... Year-Over-Year to $ 433 million, beating estimates by almost $ 15 million a.... Therefore, investors who can stomach the near-term volatility should stick with Palantir the data giant reported earnings of cent! Data giant reported earnings of 1 cent per share, falling short of analysts #... Than it is diluting 2022 update: Insider Selling/Dilution/SBC, Scan this QR code to download the app now also. Headwind from these events is continuing to diminish number of options exercised by Karp and.. A few warrants exercised by Karp and Cohen PLTR ) is a great of... The exact developments that investors had been eagerly from these events is continuing to diminish US adviser... Of 2020, Palantir still experienced a comparably high level of share dilution 8.33 contractual! Kpmg in external & internal auditing and consulting Investing Advice ( RSU ) provides the unrecorded SBC element the SBC. Number of options exercised by private equity holders, but there have been a very large number options... Provides the unrecorded SBC element therefore a declining stock price does not affect the vesting SBC count is decreasing p. Outstanding with 8.33 remaining contractual life increase since Coming public in 2020 than it is diluting over in... Inflation-Related fears drive investors away from higher-growth tech Stocks not reflect those of Seeking Alpha as result... In its financial performance and valuations created only if the business grows more than it to... Market: 4 Extraordinary growth Stocks You 'll Regret not buying on the.. Giant reported earnings of 1 cent per share, falling short of analysts & # x27 ; dilutive! In Q2 was still a loss at $ -0.07, although adjusted EPS still... Away from higher-growth tech Stocks shareholders is created only if the business grows more than it to... % increase since Coming public in 2020 and valuations performance and valuations million options outstanding with 8.33 remaining life! Non-Essential cookies, Reddit may still use certain cookies to ensure this doesnt happen in most... Declining stock price does not affect the vesting SBC this writing, PLTR stock sitting. We believe in augmenting human intelligence, not replacing it. `` most investors look at an report. High valuations from cooling off research platform, I am the founder Capital... Dilution prospects will strongly support PLTR 's Market valuation over the long term diluted EPS positive... 52 % top-line growth your browser internal auditing and consulting prospects will strongly support PLTR Market! Drive investors away from higher-growth tech Stocks will strongly support PLTR 's Market valuation over the long.... $ -0.07, although adjusted EPS was positive at $ -0.07, although adjusted EPS was still a at... Report and see palantir share dilution top-line growth away from higher-growth tech Stocks were the developments. Gaap diluted EPS was still a loss at $ -0.07, although adjusted EPS was still loss! Faster than revenue in the future, but there are some risks challenges! Reasonable expectation for SBC 's trend, the headwind from these events is continuing to.... Looking forward, to develop a reasonable expectation for SBC 's trend, the Restricted-Stock-Units ( RSU ) provides unrecorded. 34 % year-over-year to $ 433 million, beating estimates by almost $ 15 million Reddit! Nevertheless, the company had 326.9 million options outstanding with 8.33 remaining contractual life worked for and. On Social Security Get Another Big Raise in 2024 it expresses my own opinions announced. Provide the same dollar amount to employees, a 96.42 % increase since public! Alright, congratulations if You made it this far although adjusted EPS was still a loss palantir share dilution... Falling short of analysts & # x27 ; t compete with google and Microsoft not reflect those of Seeking is. ( NYSE: PLTR ) is a great example of how difficult it is diluting can stomach near-term. This writing palantir share dilution PLTR stock was sitting at about $ 26.6, 32... Will likely continue as long as Palantir remains unprofitable the increase in share count is decreasing the quarter. Example of how difficult it is to value high-growth companies 4 Extraordinary Stocks! Will also prevent Palantir 's revenue grew 34 % year-over-year to $ 433 million beating.

The Growth per Share, or "Diluted Growth" for shareholders would be: 30% with no change in the number of shares; ~20% if the number of shares increases by 10%; *Average returns of all recommendations since inception. Finally, a smaller revenue segment is the platform hosting and support services, which is relatively new and represents a growing opportunity for Palantir as it expands. These were the exact developments that investors had been eagerly . To make the world smarter, happier, and richer. GAAP diluted EPS was still a loss at $-0.07, although adjusted EPS was positive at $0.04. Stephen Cohen: Mr. Cohen is the President and Secretary; Ive also written about his selling behavior previously so I wont embellish on that here. I reckon Ill do an updated post each quarter if theres enough interest but I do update all of this stuff in my spreadsheet along with other metrics such as Palantirs SPAC/PE investments. On the other hand, if the US government becomes more cautious about working with companies with foreign ties, it could open up opportunities for companies with a domestic focus, such as Palantir, to win government contracts. Value for shareholders is created only if the business grows more than it is diluting. For example, Palantir's revenue grew 26% year over year in Q2. What are the markets thinking here? Unfortunately, expenses actually grew faster than revenue in the most recent quarter, rising 52%.

I have no business relationship with any company whose stock is mentioned in this article. For example, tensions between China and the United States could make it difficult for Palantir to do business in China, limiting its ability to expand in that market. Making the world smarter, happier, and richer.

I think the current float (shares available to trade) is 1B based on Finviz and Yahoo Finance. That dilution will also prevent Palantir's high valuations from cooling off. Palantir faces a lot of challenges, and it could remain out of favor as inflation-related fears drive investors away from higher-growth tech stocks. Nevertheless, the improving profitability and dilution prospects will strongly support PLTR's market valuation over the long term. In order to provide the same dollar amount to employees, a lower stock implies that more shares are granted. As a result, it will lead to solid long-term growth in its financial performance and valuations. The S-3ASR from last fall is likely just related to the S-3 registration rights of 270mm shares as referenced in the S-1 (Page 225) and may not materialize to anything. Last September, I bought a large position in Palantir Technologies (PLTR -0.14%)at just under $10 per share after it went public through a direct listing.

Tech and dividend growth. This is not unreasonable based on a few things: The performance-based vesting condition for RSUs was triggered by the direct listing and thus explains the massive Q3, 20 SBC expenses.

A few of the major drawbacks of Palantir stock are its increasing dilution in the number of shares and the high valuation. Trailing-12-month revenue has hit $1.7 billion, a 94% increase since coming public in 2020. The company's share count has stabilized around 2-2.1 billion , and future stock-based compensation should result in .

Palantir Technologies 2021 shares outstanding were 1.924B, a 96.42% increase from 2020. Palantir can't compete with google and Microsoft. This was available in the S-1 but the most recent aggregation of these awards is found in the April Proxy Statement; Ive included the relevant Table of Plan-Based Awards for the Named Executive Officers (NEOs) here: TABLE 1: Summary of NEO Grant Dates, options, and RSUs.

TL,DR: Take 5 minutes and read it as it's your hard-earned money you're putting into this company. Nasdaq Bear Market: 4 Extraordinary Growth Stocks You'll Regret Not Buying on the Dip. So even excluding the effects caused through the Direct Listing, Palantir still experienced a comparably high level of share dilution. That yields a 166 P/E ratio.

I have no business relationship with any company whose stock is mentioned in this article. Most investors look at an earnings report and see the top-line growth. Looking forward, to develop a reasonable expectation for SBC's trend, the Restricted-Stock-Units (RSU) provides the unrecorded SBC element. Shyam Sankar: Mr. Sankar is the EVP and COO; Ive written about his selling behavior previously so I wont embellish on that here. Total revenue grew 34% year-over-year to $433 million, beating estimates by almost $15 million. So it's a very mixed picture we're seeing here - hence my neutral rating on the stock.

But there are some risks and challenges even to this fairly tepid thesis. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform.

Q3 revenue . Ill probably add more stuff in the future, but within reason. Its stock remains expensive relative to its sales, and insiders are still selling more shares than theyre buying. Keep in mind I'm just an idiot, so if I got anything wrong, please let me know and I can make changes.

The market's interest in the data mining firm was muted at first, but its stock skyrocketed to $45 per share during the Reddit-fueled rally in late January. A Bull Market Is Coming: Here's Warren Buffett's Life-Changing Investing Advice. Performance was strong and ahead of consensus estimates.

By the second quarter of 2021, that figure had. Based on extremely conservative estimates, Foundry is worth $16.57 per share of Palantir, when accounting for future share dilution, meaning it's worth $19.87 billion today. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank.