In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Palantir Technologies PLTR alongside its primary competitors in the Software industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to 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 | 180.58 | 12.78 | 21.76 | 2.91% | $0.09 | $0.52 | 20.78% |
| Salesforce Inc | 68.46 | 4.68 | 8.12 | 2.46% | $2.75 | $7.14 | 10.77% |
| SAP SE | 88.27 | 4.83 | 6.62 | -1.92% | $-0.42 | $5.76 | 8.06% |
| Adobe Inc | 46.36 | 14.06 | 11.15 | 3.88% | $1.21 | $4.59 | 11.32% |
| Intuit Inc | 66.92 | 10.85 | 12.30 | 2.08% | $0.6 | $2.53 | 11.34% |
| Synopsys Inc | 64.04 | 13.27 | 14.69 | 7.01% | $0.53 | $1.32 | 21.15% |
| Cadence Design Systems Inc | 76.33 | 22.36 | 19.61 | 7.1% | $0.36 | $0.88 | -1.23% |
| Workday Inc | 48.24 | 8.25 | 9.18 | 16.16% | $0.24 | $1.46 | 16.75% |
| Roper Technologies Inc | 39.02 | 3.20 | 8.95 | 2.17% | $0.73 | $1.18 | 14.36% |
| Autodesk Inc | 52.56 | 25.40 | 8.65 | 16.9% | $0.35 | $1.34 | 3.89% |
| Datadog Inc | 348.44 | 17.99 | 18.86 | 2.02% | $0.06 | $0.5 | 26.89% |
| Ansys Inc | 66.24 | 5.32 | 12.96 | 5.29% | $0.09 | $0.4 | 15.99% |
| AppLovin Corp | 50.64 | 36.38 | 8.26 | 23.28% | $0.45 | $0.76 | 47.9% |
| PTC Inc | 76.92 | 7.48 | 9.85 | 3.98% | $0.21 | $0.49 | 11.23% |
| Tyler Technologies Inc | 110.92 | 6.87 | 10.54 | 1.82% | $0.11 | $0.22 | 8.58% |
| Zoom Video Communications Inc | 30.83 | 2.47 | 4.35 | 3.87% | $0.2 | $0.87 | 2.56% |
| Bentley Systems Inc | 51.48 | 17.90 | 14.80 | 7.74% | $0.12 | $0.28 | 7.43% |
| NICE Ltd | 44.64 | 4.31 | 6.36 | 2.49% | $0.19 | $0.42 | 9.61% |
| Dynatrace Inc | 91.83 | 7.04 | 9.99 | 2.3% | $0.05 | $0.3 | 22.74% |
| Average | 79.01 | 11.81 | 10.85 | 6.04% | $0.43 | $1.69 | 13.85% |
After a detailed analysis of Palantir Technologies, the following trends become apparent:
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At 180.58, the stock's Price to Earnings ratio significantly exceeds the industry average by 2.29x, suggesting a premium valuation relative to industry peers.
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With a Price to Book ratio of 12.78, which is 1.08x 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.
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With a relatively high Price to Sales ratio of 21.76, which is 2.01x the industry average, the stock might be considered overvalued based on sales performance.
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The company has a lower Return on Equity (ROE) of 2.91%, which is 3.13% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
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Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $90 Million, which is 0.21x below the industry average, potentially indicating lower profitability or financial challenges.
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With lower gross profit of $520 Million, which indicates 0.31x below the industry average, the company may experience lower revenue after accounting for production costs.
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The company's revenue growth of 20.78% is notably higher compared to the industry average of 13.85%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
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 examining Palantir Technologies in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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Palantir Technologies is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.06.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
Key Takeaways
For Palantir Technologies in the Software industry, the PE, PB, and PS ratios are all high compared to its peers, indicating potentially overvalued stock. The low ROE, EBITDA, and gross profit suggest lower profitability and operational efficiency compared to industry peers. However, the high revenue growth rate may indicate strong potential for future growth and market expansion.
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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