Kardd
My bull case on Palantir Technologies Inc. (NASDAQ:PLTR) was traditionally based on the commercial segment, particularly in the U.S. However, with the recent enterprise agreement with the U.S. Army, worth up to $10 billion for the next ten
Palantir: A $10 Billion Upside (Rating Downgrade)
Summary
- My bull case for Palantir Technologies Inc. is now centered on the government segment after the $10 billion U.S. Army deal, as commercial growth lags outside the U.S.
- The commercial segment, particularly non-U.S., is underperforming when compared to the government unit, with anemic adoption in Europe.
- In Q1, non-U.S. commercial revenue declined 5% YOY and 11% sequentially, while non-U.S. government revenue grew 45% YOY and 2% sequentially.
- I'd keep a close watch on Q2 earnings on August 4 for management’s commentary on contract execution and any adjustments to FY2025 revenue guidance.
- Even though revenue could have a big upside from this contract, there is a risk of disappointment from a margin perspective. Therefore, I downgrade my PLTR rating to a Buy.
Small deep value individual investor, with a modest private investment portfolio, split approx. 50%-50% between shares and call options. I have a B.Sc. in aeronautical engineering and over 6 years of experience as an engineering consultant in the aerospace sector. The latter statement is not relevant in any way whatsoever to my investment style, but I thought to add it for self-indulgent purposes. I have a contrarian investment style, highly risky, and often dealing with illiquid options. How illiquid? Well, you can land a Jumbo on the spread and still have clearance for take-off. From time to time, I buy shares, mostly to not be categorized as a degen by my fellow investor friends, therefore the 50%-50% allocation. My timeframe tends to be between 3-24 months.I like stocks that have experienced a recent sell-off due to non-recurrent events, particularly when insiders are buying shares at the new lower price. This is how I often screen through thousands of stocks, mainly in the US, although I may own shares in banana republics. I use fundamental analysis to check the health of companies that pass through my screening process, their leverage, and then compare their financial ratios with the sector, and industry median and average. I also do professional background checks of each insider who purchased shares after the recent sell-off. I use technical analysis to optimize the entry and exit points of my positions. I mainly use multicolor lines for support and resistance levels on weekly charts. From time to time I draw trend lines, taken for granted, in multicolor patterns. Note: I tried to keep my introduction as real, and authentic as possible. I dislike empty suits, high-level BS, deep-level BS, unnecessary jargon, and self-indulgent, third-person written introductions with an air of superiority.Thanks for reading my introduction!
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