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 | 260 | 14.90 | 24.17 | 2.8% | $0.11 | $0.5 | 8.99% |
| Salesforce Inc | 108.89 | 4.77 | 8.31 | 2.11% | $2.42 | $6.57 | 11.27% |
| Adobe Inc | 45.85 | 14.83 | 12.82 | 9.18% | $2.06 | $4.41 | 11.56% |
| SAP SE | 53.69 | 4.44 | 6.19 | 2.75% | $2.23 | $6.2 | 9.34% |
| Intuit Inc | 70.79 | 10.65 | 12.39 | 1.41% | $0.53 | $2.22 | 14.67% |
| Synopsys Inc | 69.19 | 13.60 | 14.55 | 5.77% | $0.48 | $1.27 | 24.51% |
| Cadence Design Systems Inc | 76.47 | 23.36 | 19.48 | 9.94% | $0.41 | $0.96 | 18.75% |
| Workday Inc | 1258.25 | 11.99 | 11.35 | 1.76% | $0.23 | $1.42 | 16.67% |
| Roper Technologies Inc | 42.73 | 3.33 | 9.46 | 2.26% | $0.72 | $1.13 | 3.2% |
| Autodesk Inc | 60.22 | 36.85 | 10.34 | 17.93% | $0.37 | $1.29 | 10.47% |
| Datadog Inc | 911.86 | 20.71 | 21.01 | 2.82% | $0.07 | $0.48 | 7.69% |
| Ansys Inc | 60.06 | 5.77 | 13.44 | 1.12% | $0.11 | $0.39 | -2.9% |
| Splunk Inc | 225.23 | 131.70 | 6.48 | 121.15% | $0.14 | $0.86 | 14.8% |
| PTC Inc | 89.32 | 7.53 | 9.70 | 2.42% | $0.16 | $0.44 | 18.09% |
| AppLovin Corp | 58.49 | 15.51 | 6.33 | 14.58% | $0.37 | $0.68 | 10.3% |
| Zoom Video Communications Inc | 80.67 | 2.52 | 4.16 | 1.96% | $0.2 | $0.87 | 3.16% |
| Tyler Technologies Inc | 112.21 | 6.24 | 9.54 | 1.34% | $0.09 | $0.21 | -2.78% |
| Bentley Systems Inc | 95.20 | 22.41 | 14.42 | 7.94% | $0.1 | $0.24 | 14.27% |
| Manhattan Associates Inc | 86.06 | 53.69 | 16.36 | 19.96% | $0.06 | $0.13 | 20.27% |
| Dynatrace Inc | 76.15 | 7.77 | 10.95 | 2.3% | $0.05 | $0.3 | 22.74% |
| NICE Ltd | 46.33 | 4.49 | 6.53 | 2.89% | $0.16 | $0.41 | 8.4% |
| Average | 181.38 | 20.11 | 11.19 | 11.58% | $0.55 | $1.52 | 11.72% |
By thoroughly analyzing Palantir Technologies, we can discern the following trends:
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At 260.0, the stock's Price to Earnings ratio significantly exceeds the industry average by 1.43x, suggesting a premium valuation relative to industry peers.
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The current Price to Book ratio of 14.9, which is 0.74x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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The stock's relatively high Price to Sales ratio of 24.17, surpassing the industry average by 2.16x, may indicate an aspect of overvaluation in terms of sales performance.
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The company has a lower Return on Equity (ROE) of 2.8%, which is 8.78% 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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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $110 Million, which is 0.2x 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 0.33x below the industry average, potentially indicating lower revenue after accounting for production costs.
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The company is witnessing a substantial decline in revenue growth, with a rate of 8.99% compared to the industry average of 11.72%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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 light of the Debt-to-Equity ratio, a comparison between Palantir Technologies and its top 4 peers reveals the following information:
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Palantir Technologies has a 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 suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.
Key Takeaways
For Palantir Technologies in the Software industry, the PE ratio is high compared to peers, indicating potentially overvalued stock. The PB ratio is low, suggesting the stock may be undervalued based on its book value. The PS ratio is high, implying investors are willing to pay more for each dollar of revenue generated. In terms of ROE, EBITDA, gross profit, and revenue growth, Palantir Technologies lags behind its industry peers, indicating lower profitability and growth potential.
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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