In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Palantir Technologies PLTR in relation to its major competitors in the Software industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer 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 | 243 | 13.69 | 22.59 | 2.8% | $0.11 | $0.5 | 8.99% |
| Salesforce Inc | 108.68 | 4.76 | 8.29 | 2.11% | $2.42 | $6.57 | 11.27% |
| Adobe Inc | 51.37 | 16.61 | 14.36 | 9.18% | $2.06 | $4.41 | 11.56% |
| SAP SE | 54.59 | 4.52 | 6.30 | 2.75% | $2.23 | $6.2 | 9.34% |
| Intuit Inc | 69.58 | 10.47 | 12.18 | 1.41% | $0.53 | $2.22 | 14.67% |
| Synopsys Inc | 68.53 | 13.47 | 14.42 | 5.77% | $0.48 | $1.27 | 24.51% |
| Cadence Design Systems Inc | 83.38 | 25.57 | 20.37 | 8.45% | $0.35 | $0.91 | 13.36% |
| Workday Inc | 1202.62 | 11.46 | 10.85 | 1.76% | $0.23 | $1.42 | 16.67% |
| Roper Technologies Inc | 42.82 | 3.34 | 9.48 | 2.26% | $0.72 | $1.13 | 3.2% |
| Autodesk Inc | 59.90 | 36.66 | 10.29 | 17.93% | $0.37 | $1.29 | 10.47% |
| Ansys Inc | 60.90 | 5.85 | 13.63 | 1.12% | $0.11 | $0.39 | -2.9% |
| Splunk Inc | 222.46 | 130.08 | 6.40 | 121.15% | $0.14 | $0.86 | 14.8% |
| PTC Inc | 89.45 | 7.54 | 9.72 | 2.42% | $0.16 | $0.44 | 18.09% |
| Zoom Video Communications Inc | 83.66 | 2.61 | 4.32 | 1.96% | $0.2 | $0.87 | 3.16% |
| Tyler Technologies Inc | 116.36 | 6.36 | 9.54 | 1.67% | $0.11 | $0.23 | 4.54% |
| Dynatrace Inc | 102.72 | 9.74 | 13.56 | 2.04% | $0.05 | $0.29 | 25.91% |
| AppLovin Corp | 164.46 | 14.11 | 5.60 | 8.25% | $0.31 | $0.6 | 21.2% |
| Manhattan Associates Inc | 87.73 | 54.73 | 16.68 | 19.96% | $0.06 | $0.13 | -0.08% |
| Bentley Systems Inc | 92.62 | 21.80 | 14.03 | 7.94% | $0.1 | $0.24 | 14.27% |
| NICE Ltd | 43.60 | 4.23 | 6.15 | 2.89% | $0.16 | $0.41 | 8.4% |
| Average | 147.65 | 20.21 | 10.85 | 11.63% | $0.57 | $1.57 | 11.71% |
Through a thorough examination of Palantir Technologies, we can discern the following trends:
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The current Price to Earnings ratio of 243.0 is 1.65x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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With a Price to Book ratio of 13.69, significantly falling below the industry average by 0.68x, it suggests undervaluation and the possibility of untapped growth prospects.
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The Price to Sales ratio of 22.59, which is 2.08x 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 2.8% is 8.83% 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 $110 Million, which is 0.19x below the industry average, the company may face lower profitability or financial challenges.
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Compared to its industry, the company has lower gross profit of $500 Million, which indicates 0.32x below the industry average, potentially indicating lower revenue after accounting for production costs.
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The company's revenue growth of 8.99% is significantly below the industry average of 11.71%. This suggests a potential struggle in generating increased sales volume.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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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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 0.07.
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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 PE, PB, and PS ratios for Palantir Technologies indicate that the company's stock price is relatively high compared to its earnings, book value, and sales. This suggests that investors may be paying a premium for the company's future growth potential. However, the low ROE, EBITDA, gross profit, and revenue growth ratios indicate that Palantir Technologies may be underperforming compared to its peers in the software industry. This could be a cause for concern as it may indicate a lack of profitability and growth potential for the company.
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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