In April 2023. Data analysis company Palantir Technologies(NASDAQ: PLTR) commercially published its fourth main software package called Artificial intelligence platform (AIP). Ever since he released for about two years, Palantar has experienced something from the Renaissance-prey from the primarily Government performer who specializes in working with the US military at a full business software platform deployed in many leading world companies.
Basically, the influence of AIP on Palantir’s business has been noticed by growing purchases, accelerating revenue growth and expanding profit margins in recent years.
However, Palantir also showed a high level of transparency with investors outside traditional financial reporting. In particular, several times a year Palantir hosts AIPCON – live conference during which customers show that AIP is allocated in their jobs and tells in detail how the software starts operating efficiency and promotes new growth options.
Earlier this month, Palantir hosted the sixth installment of AIPCON. And there was an announcement that I didn’t see it was coming.
Below I will describe in detail Palantir’s new partnership with DatabricksOne of the most valuable private start-up in the world. I will do the case why I think this alliance could be incredibly lucrative in the long run and evaluate whether it is a good time now for investors to get into action.
Palantir specializes in building data ontology, which is an imaginative term technologists that use to describe how large corporations can visualize complex data sets. You can think of ontology as a giant course of work or mapping. Through these visualizations, companies can better monitor data load and make more informed, effective decisions.
Databricks, on the other hand, specializes in the construction of data warehouse and data lakes. Simply put, Databricks allows companies to store and process large data sets in different cloud architecture Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform (GCP).
The subtle shade between these two analytics providers is that Palantir AIP is optimized to launch contextual simulations to see how the job could affect the set of parameters, while the Databricks intelligence platform is primarily used for computer tasks such as machine learning, given its ability to storage and process multiple data.
Palantar’s real-time analytics and storage and calculate the ability of Databricks are largely complemented by each other. Combining both software apartments, corporations can more effectively deploy their generative AI protocols.
Picture source: Getty Images.
As I alluded, Palantir has long been considered an advisory operation for the Government with respect to the close alliance of the company with the Ministry of Defense.
However, as they have shown the last two years, the introduction of AIP has encouraged a new wave of growth of the private sector for Palantir – which now gets almost half of the commercial customers’ revenue.
Picture source: investor relations Palantir.
In this regard, Palantir currently has only 571 commercial sector buyers. I say “only” because that figure fades compared to 10,000 companies deployed by Databricks. According to the company website, Databricks broke over 60% Fortune 500.
Although the above trends show that AIP helped Palants to do spraying in the private sector, I see a strategic benefit to the Databricks-Naime partnership, Palantir now has a lucrative opportunity to cross its products within the Databricks ecosystems, with further diverse diversifying its customers’ list outside the Government agencies.
One of the most severe aspects of investment assessment in Palantar revolves around its value assessment. Given each traditional metric, Palantar’s estimate is overloaded.
For example, unlike many supplies of software growth (SAAS) growth, Palantir actually generates a positive net income and free cash flow. In this regard, the company is traded for the price to earnings (P/e) multiple 442 and the price ratio to free cash flow (P/FCF) from 180. The above figures clearly show that Palantir is a profitable job, its profile of profitability is still quite small, using Multiples based on earnings.
Instead, I will use the price and sales ratio (p/s) according to a reference palander with a series of peers with high-growth SAAS (as seen in the upper chart). Even with a significant sale of Palantir shares in the last few weeks, the shares remain price range compared to other leading software peers on P/S.
Although the above trends show clear signs of expansion of evaluation in Palantar in the last year, I see that convincing growth opportunities are ahead of us – largely thanks to different strategic federations of the company. In my eyes, the agreement with Databricks is a supplement to the game on the existing partnerships of the private sector Palanti Meta platformAmazon, ProphetAnd Microsoft – many of which are recently not fully produced by fruit.
Despite the expensive nature of the shares, now maybe a good opportunity to take advantage of some transient actions of a depressed price. In the long run, I think Palantar’s sales and profit growth will continue to accelerate – especially since the company forces more alliances with the largest and most influential software industry players.
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Randa Zuckerberg, former director of the development of the market and spokeswoman for Facebook and sister of Meta Platform Executive Director Mark Zuckerberg, is a member of the Board of Directors Motley Fool. Adam Spaccoco It has positions in the meta platforms and paulantir technologies. Motley Fool has positions and recommends Crowdstrike, Datadog, Meta platforms, Mongodb, Oracle, Palantir Technologies, Servicenow and Snowflake. Motley Fool has disclosure rules.
