Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. 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 | 226.92 | 16.06 | 27.34 | 2.91% | $0.09 | $0.52 | 20.78% |
| Adobe Inc | 52.06 | 17.28 | 12.92 | 10.38% | $2.19 | $4.71 | 10.24% |
| Salesforce Inc | 47.34 | 4.27 | 7.24 | 2.57% | $2.6 | $6.97 | 10.74% |
| SAP SE | 94.48 | 5.17 | 7.09 | -1.92% | $-0.42 | $5.76 | 8.06% |
| Intuit Inc | 61.81 | 9.97 | 12 | 13.4% | $3.34 | $5.67 | 11.95% |
| Synopsys Inc | 67.75 | 13.31 | 15.30 | 4.23% | $0.41 | $1.15 | 15.2% |
| Cadence Design Systems Inc | 83.62 | 24.52 | 21.49 | 7.1% | $0.36 | $0.88 | -1.23% |
| Workday Inc | 40.84 | 7.45 | 8.10 | 1.32% | $0.23 | $1.5 | 18.17% |
| Roper Technologies Inc | 41.30 | 3.38 | 9.48 | 2.17% | $0.73 | $1.18 | 14.36% |
| Autodesk Inc | 53.88 | 24.72 | 9.50 | 12.55% | $0.34 | $1.28 | 11.66% |
| Datadog Inc | 395.76 | 20.44 | 21.42 | 2.02% | $0.06 | $0.5 | 26.89% |
| Ansys Inc | 66.52 | 5.35 | 13.01 | 0.64% | $0.09 | $0.4 | -8.41% |
| AppLovin Corp | 52.29 | 37.57 | 8.53 | 23.28% | $0.45 | $0.76 | 47.9% |
| PTC Inc | 78.02 | 7.59 | 9.99 | 3.98% | $0.21 | $0.49 | 11.23% |
| Tyler Technologies Inc | 116.42 | 7.21 | 11.06 | 1.82% | $0.11 | $0.22 | 8.58% |
| Zoom Video Communications Inc | 21.50 | 2.17 | 3.97 | 2.65% | $0.23 | $0.87 | 3.25% |
| Manhattan Associates Inc | 80.99 | 63.68 | 16.11 | 20.78% | $0.06 | $0.14 | 15.18% |
| Bentley Systems Inc | 45.81 | 15.93 | 13.17 | 7.74% | $0.12 | $0.28 | 7.43% |
| Dynatrace Inc | 85.94 | 6.59 | 9.35 | 1.93% | $0.04 | $0.31 | 21.11% |
| Average | 82.57 | 15.37 | 11.65 | 6.48% | $0.62 | $1.84 | 12.91% |
Through a meticulous analysis of Palantir Technologies, we can observe the following trends:
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The current Price to Earnings ratio of 226.92 is 2.75x 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 16.06 relative to the industry average by 1.04x suggests company might be overvalued based on its book value.
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With a relatively high Price to Sales ratio of 27.34, which is 2.35x the industry average, the stock might be considered overvalued based on sales performance.
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The Return on Equity (ROE) of 2.91% is 3.57% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $90 Million, which is 0.15x below the industry average, the company may face lower profitability or financial challenges.
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The gross profit of $520 Million is 0.28x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company is experiencing remarkable revenue growth, with a rate of 20.78%, outperforming the industry average of 12.91%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile 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:
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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
The high PE, PB, and PS ratios of Palantir Technologies suggest that the company is currently 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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