In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating Palantir Technologies PLTR against its key competitors in the Software industry. By examining key financial metrics, market position, and growth prospects, we aim 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 | 264.53 | 24.86 | 43.09 | 3.43% | $0.11 | $0.55 | 27.15% |
| Salesforce Inc | 51.18 | 4.87 | 7.90 | 2.44% | $2.79 | $7.17 | 8.39% |
| SAP SE | 95.89 | 6.30 | 7.84 | 3.53% | $2.71 | $6.21 | 9.38% |
| Adobe Inc | 40.73 | 14.56 | 10.42 | 11.46% | $2.31 | $4.85 | 10.59% |
| Intuit Inc | 58.69 | 9.31 | 10.67 | -0.11% | $0.13 | $2.4 | 17.4% |
| Synopsys Inc | 51.16 | 9.89 | 11.92 | 5.49% | $0.46 | $1.24 | 12.65% |
| Cadence Design Systems Inc | 66.51 | 15.17 | 15.87 | 5.86% | $0.38 | $0.92 | 8.61% |
| Workday Inc | 40.51 | 7.46 | 8.02 | 1.6% | $0.28 | $1.57 | 16.68% |
| Autodesk Inc | 58.72 | 24.96 | 10.69 | 12.17% | $0.39 | $1.36 | 11.9% |
| Roper Technologies Inc | 40.17 | 3.16 | 8.68 | 2.01% | $0.69 | $1.19 | 2.78% |
| AppLovin Corp | 71.02 | 68.17 | 14.71 | 39.35% | $0.51 | $0.8 | 43.98% |
| Datadog Inc | 268.87 | 17.70 | 19.44 | 1.9% | $0.06 | $0.52 | 26.66% |
| Ansys Inc | 56.74 | 5.02 | 12.11 | 2.37% | $0.2 | $0.52 | 19.64% |
| Tyler Technologies Inc | 110.67 | 7.91 | 12.61 | 2.37% | $0.12 | $0.24 | 9.84% |
| Zoom Video Communications Inc | 26.38 | 2.67 | 5.04 | 2.6% | $0.23 | $0.88 | 2.09% |
| PTC Inc | 75.61 | 7.38 | 10.06 | 2.32% | $0.13 | $0.41 | -4.37% |
| Manhattan Associates Inc | 78.46 | 60.51 | 16.76 | 24.6% | $0.07 | $0.15 | 0.51% |
| Dynatrace Inc | 104.21 | 7.81 | 10.88 | 1.89% | $0.06 | $0.32 | 19.93% |
| Average | 76.21 | 16.05 | 11.39 | 7.17% | $0.68 | $1.81 | 12.74% |
By closely studying Palantir Technologies, we can observe the following trends:
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The current Price to Earnings ratio of 264.53 is 3.47x 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 24.86 relative to the industry average by 1.55x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 43.09, which is 3.78x 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 Return on Equity (ROE) of 3.43% is 3.74% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
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The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $110 Million, which is 0.16x below the industry average. This potentially indicates lower profitability or financial challenges.
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The gross profit of $550 Million is 0.3x 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 12.74%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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 can be assessed by comparing it to its top 4 peers, resulting in the following observations:
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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 its peers in the Software industry, indicating potentially overvalued stock. On the other hand, the low ROE, EBITDA, and gross profit, along with high revenue growth, suggest operational inefficiencies and challenges in generating profits compared to industry standards.
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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