In this video I will be talking about Palantir (PLTR 0.00%) and why I still believe it's a must-have for long-term investors. Yes, you will be paying a premium, but I believe it's a premium worth paying. New contracts are announced frequently, Foundry is starting to gain some traction, and the private market is still untapped.
In Q1 2021, revenue grew 49% year over year, which helped to push adjusted operating income from last year's $16 million loss to a $117 million gain. Palantir posted $151 million in free cash flow in Q1, up $441 million year over year and representing a 44% margin. It's expected to be profitable this year for the first time.
Management predicts annual revenue growth of 30% or greater for 2021 through 2025, and with Foundry just getting started and the private market still untapped, that looks achievable.
It's no secret that Palantir likes to help the government and vice versa. The U.S. government was the first organization to back Palantir in the early 2000s. Palantir CEO Alex Karp publicly sided with the government, and that loyalty has helped Palantir land many government projects. In the recent Q1 report, management disclosed that U.S. government revenue had grown 83% year over year.
In recent months Palantir signed various government contracts, such as:
- $111 million from U.S. Special Operations Command
- $7.4 million from the CDC
- $90 million from the National Nuclear Safety Administration
- $18.4 million from the FAA
- $32.5 million from the U.S. Space Force Command
With Palantir building up its reputation among government bodies, it won't be long until the private market starts contacting them.
As mentioned above, Foundry is starting to get some traction, and its ability to provide insights into massive data pools is making its way into the private sector. Pharmaceutical companies are using Palantir, turning data into insights to improve patients' lives and the efficiency of healthcare delivery. Bankers and insurers turn to Palantir to collect and analyze data to detect laundering and fraud. Automotive manufacturers such as Scuderia Ferrari are using Palantir to integrate and analyze performance data in order to make faster, more data-driven decisions. Aviation companies such as Airbus are using Palantir to simplify supply chains, saving costs and time.
Do watch the video below for the full insights.
*Stock prices used were the closing prices of June 29, 2021. The video was published on June 29, 2021.