In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Palantir Technologies PLTR and its primary competitors in the Software industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within 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 | 252.22 | 14.45 | 23.44 | 2.8% | $0.11 | $0.5 | 19.61% |
| Salesforce Inc | 72.56 | 4.96 | 8.60 | 2.46% | $2.75 | $7.14 | 10.77% |
| SAP SE | 58.44 | 4.87 | 6.81 | 3.05% | $2.32 | $6.2 | 5.02% |
| Adobe Inc | 47.47 | 14.40 | 11.42 | 3.88% | $1.21 | $4.59 | 11.32% |
| Intuit Inc | 63.62 | 10.31 | 11.70 | 2.08% | $0.6 | $2.53 | 11.34% |
| Synopsys Inc | 63.93 | 13.24 | 14.67 | 7.01% | $0.53 | $1.32 | 21.15% |
| Cadence Design Systems Inc | 81.30 | 24.87 | 20.71 | 9.94% | $0.41 | $0.96 | 18.75% |
| Workday Inc | 51.58 | 8.78 | 9.82 | 16.16% | $0.24 | $1.46 | 16.75% |
| Roper Technologies Inc | 42.77 | 3.34 | 9.47 | 2.26% | $0.72 | $1.13 | 12.76% |
| Autodesk Inc | 58.80 | 28.41 | 9.68 | 16.9% | $0.35 | $1.34 | 3.89% |
| Datadog Inc | 867.79 | 19.91 | 20 | 2.82% | $0.07 | $0.48 | 25.62% |
| Ansys Inc | 60.51 | 5.60 | 13.35 | 5.29% | $0.37 | $0.74 | 15.99% |
| MicroStrategy Inc | 60.88 | 12.61 | 53.69 | 5.93% | $-0.04 | $0.1 | -6.09% |
| AppLovin Corp | 74.35 | 19.23 | 8.05 | 14.58% | $0.37 | $0.68 | 35.73% |
| PTC Inc | 93.64 | 7.90 | 10.17 | 2.42% | $0.16 | $0.44 | 18.09% |
| Zoom Video Communications Inc | 30.54 | 2.42 | 4.31 | 3.87% | $0.2 | $0.87 | 2.56% |
| Tyler Technologies Inc | 106.97 | 6 | 9.09 | 1.34% | $0.09 | $0.21 | 6.35% |
| NICE Ltd | 49.34 | 4.76 | 7.03 | 2.49% | $0.19 | $0.42 | 9.61% |
| Manhattan Associates Inc | 85.71 | 53.47 | 16.29 | 19.96% | $0.06 | $0.13 | 20.27% |
| Bentley Systems Inc | 49.26 | 16.58 | 13.33 | 22.81% | $0.05 | $0.24 | 8.26% |
| Average | 106.29 | 13.77 | 13.59 | 7.64% | $0.56 | $1.63 | 13.06% |
By conducting a comprehensive analysis of Palantir Technologies, the following trends become evident:
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The current Price to Earnings ratio of 252.22 is 2.37x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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The elevated Price to Book ratio of 14.45 relative to the industry average by 1.05x suggests company might be overvalued based on its book value.
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The stock's relatively high Price to Sales ratio of 23.44, surpassing the industry average by 1.72x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 2.8% is 4.84% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
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Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $110 Million, which is 0.2x below the industry average, potentially indicating lower profitability or financial challenges.
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The gross profit of $500 Million is 0.31x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company's revenue growth of 19.61% exceeds the industry average of 13.06%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its equity.
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:
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When considering the debt-to-equity ratio, Palantir Technologies exhibits a stronger financial position compared to its top 4 peers.
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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.
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