In the fast-paced 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 in comparison to its major competitors within the Software industry. By analyzing crucial 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 | 255.29 | 23.99 | 41.59 | 3.43% | $0.11 | $0.55 | 27.15% |
| Salesforce Inc | 50.81 | 4.84 | 7.84 | 2.44% | $2.79 | $7.17 | 8.39% |
| SAP SE | 98.07 | 5.93 | 7.65 | 2.1% | $1.94 | $6.02 | 9.72% |
| Adobe Inc | 43.14 | 15.42 | 11.04 | 11.46% | $2.31 | $4.85 | 10.59% |
| Intuit Inc | 59.13 | 9.38 | 10.76 | -0.11% | $0.13 | $2.4 | 17.4% |
| Synopsys Inc | 56.27 | 10.87 | 13.11 | 5.49% | $0.46 | $1.24 | 12.65% |
| Cadence Design Systems Inc | 73.09 | 18.13 | 18.51 | 5.86% | $0.38 | $0.92 | 8.61% |
| Workday Inc | 41.81 | 7.70 | 8.28 | 1.6% | $0.28 | $1.57 | 16.68% |
| Autodesk Inc | 58.46 | 24.85 | 10.64 | 12.17% | $0.39 | $1.36 | 11.9% |
| Roper Technologies Inc | 41.39 | 3.27 | 9.08 | 1.88% | $0.69 | $1.19 | 12.12% |
| AppLovin Corp | 62.09 | 59.60 | 12.86 | 39.35% | $0.51 | $0.8 | 43.98% |
| Datadog Inc | 274.72 | 18.08 | 19.86 | 1.9% | $0.06 | $0.52 | 26.66% |
| Ansys Inc | 59.28 | 5.25 | 12.65 | 2.37% | $0.2 | $0.52 | 19.64% |
| Tyler Technologies Inc | 124.16 | 8.17 | 12.73 | 2.2% | $0.12 | $0.24 | 7.28% |
| PTC Inc | 75.71 | 7.39 | 10.07 | 2.32% | $0.13 | $0.41 | -4.37% |
| Zoom Video Communications Inc | 24.25 | 2.45 | 4.64 | 2.6% | $0.23 | $0.88 | 2.09% |
| Manhattan Associates Inc | 92.88 | 77.54 | 19.09 | 21.98% | $0.07 | $0.15 | 14.85% |
| Dynatrace Inc | 105.02 | 7.87 | 10.96 | 1.89% | $0.06 | $0.32 | 19.93% |
| Bentley Systems Inc | 44.32 | 15.65 | 13.22 | 7.52% | $0.1 | $0.27 | 11.32% |
| Average | 76.92 | 16.8 | 11.83 | 6.95% | $0.6 | $1.71 | 13.86% |
By closely studying Palantir Technologies, we can observe the following trends:
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The current Price to Earnings ratio of 255.29 is 3.32x 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 23.99 relative to the industry average by 1.43x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 41.59, which is 3.52x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The company has a lower Return on Equity (ROE) of 3.43%, which is 3.52% 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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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $110 Million is 0.18x below the industry average, suggesting potential lower profitability or financial challenges.
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The gross profit of $550 Million is 0.32x 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 27.15%, outperforming the industry average of 13.86%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative 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.
In terms of the Debt-to-Equity ratio, Palantir Technologies stands in comparison with its top 4 peers, leading to the following comparisons:
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Among its top 4 peers, Palantir Technologies has a stronger financial position with a lower debt-to-equity ratio of 0.06.
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This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
For Palantir Technologies, the PE, PB, and PS ratios are all high compared to industry peers, indicating the stock may be overvalued. On the other hand, the low ROE, EBITDA, and gross profit suggest lower profitability levels compared to peers. However, the high revenue growth rate shows potential for future performance improvement in the Software industry.
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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