Okay, so here's a few things about palantir. You absolutely need to understand kind of here's, the truth about palantir and i'll. Do it about three minutes now, i'm working on the full, deep dive, video into the results which will be released later today, it's taking a while. It's complex, but here are a few things for me: panettiere is a long term investment five to ten years and i've always been open about it.

The reason is, i think, right now, with talenteer we're pretty much where amazon was post the 2000 bubble, so we're in the launch pad of what panetta can be in the next 10 years. I don't expect it to take six months a year or even two years, at best, we're probably looking at five years realistically anywhere from five to ten, probably seven, eight years i don't mind and i don't care about the swings in price while it happens. So when you actually see me not giving a damn about the share price, it's not because i don't have any money in it. It's because, for me, the test is what happens in five to ten years.

I don't care what happens right now to the share price. What i do care about is i really absolutely love the results, but also things that bothered me about the way they were delivered. Now i will stipulate that the delivery was really not good. On volunteer side, i felt like they haven't, learned some important lessons that i've learned when i started to do presentations, which is basically do not read your entire slide, because people just don't stop listening to you and we'll just read off the slides when you're, showing the Slides show some highlights and then talk about it, give some extra data that is not on the slides.

However, all they did is basically read off. The slides sham again was very technical, very mechanical in this delivery. Alex carp went into this philosophical. You know i there's.

No other way to say it other than brand, and not a lot of added value was given as far as some actual things we need to know. What's going on between the breakdown in the commercial clients and the government, clients why the government side actually is slowing down a little bit in the growth only growing 16? Why do they expect only 5 growth quarter of a quarter for next water revenues? That's really interesting because they still guided for 30 for the entire year, so that would have been great. That's just a few examples. None of this was provided.

The questions were not addressed properly, so presentation-wise the earnings get enough. That's just god's honest truth. I mean we can't, you know laugh about it, however, and i want you to understand this, the quality of the presentation bears absolutely no impact on the quality of the company, the product and the potential growth. I mean they're, not good salesmen and they've been open about it, they're just not good salesmen, in fact they're awful salesmen, and that's why the pitch looked like it did now.

I think - and i'm also i would say, almost positive - that this must be trickling down to the way they sell the product of the service. So if that's the attitude this arrogant and a little bit there's a lot of hubers there there's a lot of arrogance they're. Basically saying oh we're the best we're the best. We don't need to run like a software company right, i'm sure a lot of that is trickling down into the way they sell this to clients, which i'm sure is hurting their sales and hurting their growth, but even with that which i'm sure is a handicap.
They're still growing u.s commercial business by 136 percent year over year in quarter, one which was really impressive. Now look we're talking about a company that is growing 30 a year and they're guiding for 30 a year for the next three years, even though they have a little slowdown next quarter, but still the annual growth guidance is 30, so 30 every single year until 2025. We're talking about a company that's sitting on 2.2 billion dollars of cash, no debt, their cash flow positive. I believe this quarter.

They did about 50 million at 50 million in cash, so cash flow positive, no debt, lots of cash. They have three and a half times more assets than liabilities and they're really on the brink of gaap profitability gap. Profitability basically means general accounting just generally accept accounting principles. Probability, that's where the stock-based compensation is basically turning this company into non-profitable for gap purposes, so they're almost on the break, the stock miscompensation.

That's basically making this company not profitable for accounting purposes is slowing down significantly. They went from 257 million in the uh year-over-year quarter. One of last year to 157 million this time, and that includes also the taxes they pay of the stock based components that are giving out so basically reducing stock waste compensation year over year by almost 30 percent, and you will see this happen more and more. The big spike in the stock based comp, you saw happened because of two reasons.

Reason number one is that alex and the rest of the c-level executives had a new package of options or rsus whatever. It is actually start for the next 10 years, so they just got a new grant. That's going to run for the next 10 years that spiked it a little bit and also caused a lot of selling because of exercise of the previous plan that was granted 10 years ago. The other part is that talenteer literally just set up a whole new sales and business development kind of a salesforce department that did not exist up until i think 2021, so they hired a whole new department, which meant a lot new employees, which meant a lot stock.

Based comp, i mean you cannot hire in software business, especially in an enterprise software, without giving rsus and options. There is no place like a top-tier place that hires that does not give stock-based compensation. That's kind of you know normal, so that spike already passed since the uh, the department exists and the sales department actually is in place. That's why you're seeing this reduction and this reduction will continue, because the only time you will see stock based comp is when new employees join so you'll see a little bit of it, but since they already did the mass majority of the sales apartment growth, that's not Gon na be there in the quarter, two quarter three quarter four, so my prediction is, by the end of this year: they're going to be gap profitable, because if you neutralize and i've been getting out about this, if you neutralize the 157 million that was allocated to Their expenses for stock based compensation, which is not a cash flow item.
If you neutralize this, they had 57 million of operational profit. I believe, or something like that, but in any case they're operationally profitable without stock based comp. So the only thing that needs to change for that is for stock based comp to actually get almost to zero, which it will, i believe, by the end of this year, but even then i wouldn't expect them to hit where i think they are headed by them. This year, and then the next year, they have a lot of problems.

Let's be honest about it, volunteer, at least on the commercial side, is kind of a startup, and they have a lot of the diseases that startups have. Essentially, they don't know how to sell their software, they don't have the relationship in those big companies like microsoft, does, for example, they obviously have an attitude problem with the whole we're the best or we're different. They need to be more humble. I mean they're learning and it's going to take a while for them to figure it out, but here's the thing much like in basketball.

If you give me somebody who's, six foot, nine jumps, 44 vert runs 44.2 and and has decent skills. I can teach him how to shoot better and how to pass better. I cannot teach these fundamentals and that's the main thing that the software itself, that palette has is that guy six foot, nine 44 vert 4.240 can't teach that nobody has that nobody comes close. Nobody will come close and improving strategy with absolutely they have to do they're, not good.

It's something that needs to happen will happen, and it's going to take years once it happens, they're going to basically dominate - and at this point i believe that this would be the next kind of tesla amazon. Whatever analogy you want to use, but maybe it won't, maybe it will. Nobody really knows, except jim kramer, we'll see, but i think this shake-up showed you who's really long-term and who's pretending to be long-term, because, if you're not long-term, if you're pretending to be long-term, this is bothering you. If you have options, this is bothering you.

If you are speculating, this is bothering you, but if you're equity-based investing no options and you're just there for the next five years, you honestly really don't care if anything you're happy to buy at 750.. It's just my truth about it. The full deep dive video is coming later today. You know for this.
Thank you for staying with me for the you know, for these 10 minutes, nine minutes actually see you soon.

By Stock Chat

where the coffee is hot and so is the chat

24 thoughts on “Palantir – my confession”
  1. Avataaar/Circle Created with python_avatars Christina S says:

    I am a former PLTR shareholder but sold out (at a loss) after the last earnings report, disillusioned by Sham's poor performance during the call and the no show by Alex Karp. While Alex did show up this time, he was no help. They may have a great product, but they don't appear to have the skills to make it a success. Being smart isn't enough. Don't ignore the red flags.

  2. Avataaar/Circle Created with python_avatars ateampossible says:

    How about admitting that Everything Money Chanel was right. and those that bought back when you talked about it enjoyed a 70% DROP

  3. Avataaar/Circle Created with python_avatars Reel Hawks Studio says:

    I'd rather own a good company with terrible PR than a bad one with impeccable presentations. They need to hire professionals to present results in a frank, honest, polished, and upbeat way because there's a lot to be excited about. No BS, just the facts.

  4. Avataaar/Circle Created with python_avatars Sea Wolf says:

    There is a quick way to fix those disastrous earning calls, change that management team… we don’t want to see a Guru that believe in nuclear holocaust, we need a good software Company CEO

  5. Avataaar/Circle Created with python_avatars Send It says:

    Hard to imagine I own a company that can't even do basic PPT presentations. oh, and the nuclear war comment was genius, if you're an idiot.

    F Alex Karp. The guy is too F'ing arrogant.

  6. Avataaar/Circle Created with python_avatars dbealby says:

    As watching the video pltr drops from 7.51 to 7.17.

    Still has up to 50% drop to go.

    Valuation matters.

  7. Avataaar/Circle Created with python_avatars bart De Koker says:

    the shares are being diluted thats why it is has been dropping !!!!!!
    No matter how much increase in revenue

  8. Avataaar/Circle Created with python_avatars 奇科 says:

    Honestly I like u video. But if u can't foresee next quarter, it's more difficult to foresee it in 6,7 years later.

  9. Avataaar/Circle Created with python_avatars thoughtsndshare says:

    I bought Palatir because of you Nash… and down 40% and don’t blame you. We all grown adults and responsible for our own decisions

  10. Avataaar/Circle Created with python_avatars Rok Zakrajšek says:

    Earnings calls and trying to hide negative data are too big red flags to me, it's not just being bad salesmen… it's dishonest taste i get. I cannot ignore it anymore. I cut my position substantially and i might sell out completely. Call me paper hands, but i feel way more comfortable buying other companies which are down just as much as PLTR. Gave them a pass q3 21, felt wierd they didn't improve last time… but this time it was the worst of all 3 no excuses.

  11. Avataaar/Circle Created with python_avatars Mihai George Anghel says:

    Hype retail stocks not valued by fundamentals like Tesla and Palantir will let big holes in investors pockets.

  12. Avataaar/Circle Created with python_avatars Valentino Stabile says:

    Karp thinks he's a good speaker, but then again, his brain isn't wired for presentations or communication

  13. Avataaar/Circle Created with python_avatars M R says:

    I want all the trolls and haters to come back in 10 years. Then you can call us stupid. I'm praying this goes to $3 – $5 so I can pile in and bring my average below $10. Oh happy days!

  14. Avataaar/Circle Created with python_avatars Silver Wings says:

    I don't know…… Seems to me you are investing in allot of Lipstick with PLTR. I learned a long time ago that stock price is either set by fundamentals or hype.
    There has been allot of HYPE in this market since 20020!!!!!!!!!!!! And its all starting to Shed !!!!

  15. Avataaar/Circle Created with python_avatars Prakash Damodaran says:

    Btw what’s the possibility that after getting tired of being a public company having to deal with this quarter after quarter , they decide to take it private at 7 or 8 bucks ? At these kind of valuations that’s a possibility and it will just leave the retail investors holding the bag right ?

  16. Avataaar/Circle Created with python_avatars Rudy A. says:

    Tom love your stuff and I am holding pltr bags but let’s face it the stock has been a dog and there’s so many excuses and end of the day it was a losing investment both short and long term. I mean look at Uber the stock is way below its ipo price 5yrs later and that was supposed to be a hot stock and was even recommend by most this year at the start so this notion that holding long term would reap the reward is a zero sum game.

  17. Avataaar/Circle Created with python_avatars Brian LO says:

    This company has 440M of revenue and they paid their execs 150M in stock-based comp, losing 110M in net income meanwhile only putting 25M into R&D.
    Data science is a highly competitive field, they can't afford to stand still in R&D, they straight up paid more for marketing than they did for R&D meanwhile guidance is being scaled back. Palantir is gonna have to come a lot lower or they are going to have to adjust comp and R&D expenditure before I would start buying PLTR.

  18. Avataaar/Circle Created with python_avatars Prakash Damodaran says:

    Earnings call was a total disaster.. Result was decent , and path forward is bright as well. End of the day though it all comes down to sales my friend whether to customers or to wall st or institutional investors. And the theology projection better stop because investors don’t care for that kind of talk 😜

  19. Avataaar/Circle Created with python_avatars Investidor Intrépido says:

    Why do you say revenue is growing when revenue per share is decreasing since 2019? Don't you think ignoring significant expenses and dilution and its impact on your return is a poor investment practice?

  20. Avataaar/Circle Created with python_avatars Shawn Booth says:

    Thanks Tom, being a scientist and having done a fair bit of presentations I could not believe their presentation attempt yesterday—very amateurish. Simple presentations of key data in charts and graphs always work well to give you the talking points, not too much crap on a screen to give you rambling points.

  21. Avataaar/Circle Created with python_avatars W See says:

    Good time to accumulate and stash away no fomo. Let's see what other opportunities lie in the market. SBC is going down and so they are leaning in the right direction.

  22. Avataaar/Circle Created with python_avatars Swiftflash says:

    What I do not understand is that presenting can be learned really fast and almost for free online. They just need to own that and can even hired a person to teach them and go through these presentations 🥸

  23. Avataaar/Circle Created with python_avatars John Lab says:

    Well said Tom, they’re cash flowing . No debt they have tons of cash.

    Those are key indicators they’re on the right path just need some fine tuning on the sales side of things . Thankfully they offer a service thag almost sells itself or we’d be screwed 😂🎉

  24. Avataaar/Circle Created with python_avatars Cell Chaos says:

    I recently learned that my Grandmother, who is in hospice, has $10000 worth of PLTR.

    Her portfolio is willed to myself and 5 other heirs . The other heirs are telling me that I have to buy the PLTR from them b/c they don't want it in their assets when she passes.

    I agreed, kinda sucks tho lol

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