Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Palantir Technologies PLTR in comparison to its major competitors within the Software industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.
Palantir Technologies Background
Palantir is an analytical software company that focuses on leveraging data to create efficiencies in its clients' organizations. The firm serves commercial and government clients via its Foundry and Gotham platforms, respectively. The Denver-based company was founded in 2003 and went public in 2020.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Palantir Technologies Inc | 264.44 | 15.15 | 24.58 | 2.8% | $0.11 | $0.5 | 19.61% |
| Salesforce Inc | 71.77 | 4.90 | 8.51 | 2.46% | $2.75 | $7.14 | 10.77% |
| Adobe Inc | 44.09 | 14.28 | 12.33 | 9.18% | $2.06 | $4.41 | 11.56% |
| SAP SE | 56.30 | 4.69 | 6.56 | 3.05% | $2.52 | $6.2 | 5.02% |
| Intuit Inc | 64.82 | 10.51 | 11.92 | 2.08% | $0.6 | $2.53 | 11.34% |
| Synopsys Inc | 64.54 | 13.37 | 14.81 | 7.01% | $0.53 | $1.32 | 21.15% |
| Cadence Design Systems Inc | 81.64 | 24.94 | 20.80 | 9.94% | $0.41 | $0.96 | 18.75% |
| Workday Inc | 52.45 | 8.93 | 9.99 | 16.16% | $0.24 | $1.46 | 16.75% |
| Roper Technologies Inc | 43.32 | 3.39 | 9.59 | 2.26% | $0.72 | $1.13 | 12.76% |
| Autodesk Inc | 61.14 | 29.54 | 10.07 | 16.9% | $0.35 | $1.34 | 3.89% |
| Datadog Inc | 870.07 | 19.96 | 20.05 | 2.82% | $0.07 | $0.48 | 25.62% |
| Ansys Inc | 59.75 | 5.53 | 13.18 | 5.29% | $0.37 | $0.74 | 15.99% |
| MicroStrategy Inc | 53.65 | 11.11 | 47.32 | 5.93% | $-0.04 | $0.1 | -6.09% |
| AppLovin Corp | 69.02 | 17.85 | 7.47 | 14.58% | $0.37 | $0.68 | 35.73% |
| PTC Inc | 94.37 | 7.96 | 10.25 | 2.42% | $0.16 | $0.44 | 18.09% |
| Zoom Video Communications Inc | 32.14 | 2.55 | 4.53 | 3.87% | $0.2 | $0.87 | 2.56% |
| Tyler Technologies Inc | 109.38 | 6.11 | 9.30 | 1.34% | $0.09 | $0.21 | 6.35% |
| NICE Ltd | 47.93 | 4.64 | 6.83 | 2.49% | $0.16 | $0.42 | 3.63% |
| Manhattan Associates Inc | 87.80 | 54.78 | 16.69 | 19.96% | $0.06 | $0.13 | 20.27% |
| Bentley Systems Inc | 50.16 | 16.88 | 13.58 | 22.81% | $0.05 | $0.24 | 8.26% |
| Dynatrace Inc | 70.44 | 7.19 | 10.13 | 2.3% | $0.05 | $0.3 | 22.74% |
| Average | 104.24 | 13.46 | 13.2 | 7.64% | $0.59 | $1.56 | 13.26% |
When closely examining Palantir Technologies, the following trends emerge:
-
At 264.44, the stock's Price to Earnings ratio significantly exceeds the industry average by 2.54x, suggesting a premium valuation relative to industry peers.
-
With a Price to Book ratio of 15.15, which is 1.13x the industry average, Palantir Technologies might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
-
With a relatively high Price to Sales ratio of 24.58, which is 1.86x the industry average, the stock might be considered overvalued based on sales performance.
-
The company has a lower Return on Equity (ROE) of 2.8%, which is 4.84% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
-
The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $110 Million, which is 0.19x below the industry average. This potentially indicates lower profitability or financial challenges.
-
Compared to its industry, the company has lower gross profit of $500 Million, which indicates 0.32x below the industry average, potentially indicating lower revenue after accounting for production costs.
-
The company's revenue growth of 19.61% exceeds the industry average of 13.26%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When assessing Palantir Technologies against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
-
When considering the debt-to-equity ratio, Palantir Technologies exhibits a stronger financial position compared to its top 4 peers.
-
This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.07, which can be perceived as a positive aspect by investors.
Key Takeaways
The high PE, PB, and PS ratios of Palantir Technologies suggest that the company is trading at a premium compared to its peers in the Software industry. However, the low ROE, EBITDA, and gross profit indicate that the company may not be efficiently utilizing its resources to generate profits. On the other hand, the high revenue growth rate implies that Palantir Technologies is experiencing strong top-line growth compared to its industry counterparts.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
