Feel free to beat me up in regards to the following conjectures. I have only posted a few times and wanted to get collective wisdom and thoughts from the group especially seeing Snowflake take such a beating today. I know that what Palantir does is quite different than Snowflake as I followed the thread a few weeks ago. However, they are definitely united in the data/data analysis category.
As I watched Snowflake tumble for what seems to be a looming deceleration, I pulled back up Palantir’s last earnings report. I know this is premature to make this conjecture, but the way I see it Palantir is going to win in the data analysis space. I know it is early, but I can’t ignore their acceleration in regards to specifically their commercial business. If you look at their acceleration in regards to Commercial Rev in general, and then in the micro on USA commercial Rev, I can’t help but spot that they are accelerating nicely. The problem I see is that the government contracts have been such a large part of their revenue for such a long time, that it seems to me that the market is missing that given a few more quarters of growth, Palantir will surpass government with commercial revenue.
Here are the QOQ numbers for 2021 in relation to 2020.
Q4 Q3 Q2 Q1
47% 37% 28% 19%
The US commercial numbers are even crazier, coming in at:
Q4 Q3 Q2 Q1
132% 103% 90% 72%
They also hired a specific head of sales from oracle for Europe, Asia, and ME. See this link: https://www.businesswire.com/news/home/20220126005383/en/Pal…
On the last earnings call they stated that they are hiring sales people as fast as possible, despite not wanting to hire a bunch of sales people in the past.
The only negative argument I have heard that makes sense is their use of a Forward Deployed Engineer, which means it is not a true Cloud/SAAS, but a hybrid model because an engineer needs to connect the data points for specific clients. Although, on their website they seem to be making their software into easily used “Archetypes” for certain industries, i.e. Health, Financial, Energy, etc. You can see the list here: https://www.palantir.com/offerings/
So my thesis is that eventually revenue from commercial businesses becomes their largest source of revenue and when that happens their valuation will pull away from snowflake and be considerably higher.
Also, they grew a total of 41% last year which I understand doesn’t quite make the hyper growth cut-off…but if they can push commercial rev acceleration, I could see them outpacing $ZI or $NET fairly soon (2023).
Thanks for any thoughts and don’t hold back.