In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Palantir Technologies PLTR vis-à-vis its key competitors in the Software industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight 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 | 245.78 | 14.17 | 22.84 | 2.8% | $0.11 | $0.5 | 19.61% |
| Salesforce Inc | 63.97 | 4.37 | 7.59 | 2.46% | $2.75 | $7.14 | 10.77% |
| Adobe Inc | 44.82 | 13.60 | 10.78 | 3.88% | $1.21 | $4.59 | 11.32% |
| SAP SE | 83.19 | 4.55 | 6.24 | -1.92% | $-0.42 | $5.76 | 8.06% |
| Intuit Inc | 62.83 | 10.18 | 11.55 | 2.08% | $0.6 | $2.53 | 11.34% |
| Synopsys Inc | 57.56 | 11.92 | 13.21 | 7.01% | $0.53 | $1.32 | 21.15% |
| Cadence Design Systems Inc | 71.50 | 20.94 | 18.37 | 7.1% | $0.36 | $0.88 | -1.23% |
| Workday Inc | 47.02 | 8.01 | 8.95 | 16.16% | $0.24 | $1.46 | 16.75% |
| Roper Technologies Inc | 37.79 | 3.10 | 8.67 | 2.17% | $0.73 | $1.18 | 4.16% |
| Autodesk Inc | 50.29 | 24.30 | 8.28 | 16.9% | $0.35 | $1.34 | 3.89% |
| Datadog Inc | 903.07 | 20.86 | 20.81 | 2.82% | $0.07 | $0.48 | 25.62% |
| Ansys Inc | 56.10 | 5.21 | 12.38 | 5.29% | $0.37 | $0.74 | 15.99% |
| AppLovin Corp | 71.16 | 18.26 | 7.70 | 14.58% | $0.37 | $0.68 | 35.73% |
| PTC Inc | 88.29 | 7.45 | 9.59 | 2.42% | $0.16 | $0.44 | 18.09% |
| Tyler Technologies Inc | 103.98 | 6.44 | 9.88 | 1.82% | $0.11 | $0.22 | 8.58% |
| Zoom Video Communications Inc | 29.76 | 2.36 | 4.20 | 3.87% | $0.2 | $0.87 | 2.56% |
| Bentley Systems Inc | 51.47 | 17.48 | 13.93 | 22.81% | $0.05 | $0.24 | 8.26% |
| NICE Ltd | 43.20 | 4.17 | 6.15 | 2.49% | $0.19 | $0.42 | 9.61% |
| Dynatrace Inc | 69.06 | 7.05 | 9.93 | 2.3% | $0.05 | $0.3 | 22.74% |
| Manhattan Associates Inc | 67.91 | 53.39 | 13.50 | 20.78% | $0.06 | $0.14 | 15.18% |
| Average | 105.42 | 12.82 | 10.62 | 7.11% | $0.42 | $1.62 | 13.08% |
By analyzing Palantir Technologies, we can infer the following trends:
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Notably, the current Price to Earnings ratio for this stock, 245.78, is 2.33x above the industry norm, reflecting a higher valuation relative to the industry.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 14.17 which exceeds the industry average by 1.11x.
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With a relatively high Price to Sales ratio of 22.84, which is 2.15x the industry average, the stock might be considered overvalued based on sales performance.
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With a Return on Equity (ROE) of 2.8% that is 4.31% below the industry average, it appears that the company exhibits 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 0.26x below the industry average, the company may face lower profitability or financial challenges.
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The gross profit of $500 Million is 0.31x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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With a revenue growth of 19.61%, which surpasses the industry average of 13.08%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to 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.
When assessing Palantir Technologies against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Palantir Technologies exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated 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 seen as a positive aspect for investors.
Key Takeaways
The high PE, PB, and PS ratios of Palantir Technologies suggest that the company is trading at a premium compared to its peers in the Software industry. However, the low ROE, EBITDA, and gross profit indicate that the company may not be efficiently utilizing its resources to generate profits. On the other hand, the high revenue growth rate implies that Palantir Technologies is experiencing strong top-line expansion compared to its industry counterparts.
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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