Long-established in the Software industry, Palantir Technologies Inc (PLTR, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 6.3%, juxtaposed with a three-month change of -0.14%. However, fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Palantir Technologies Inc.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 7/10
- Profitability rank: 2/10
- Growth rank: 0/10
- GF Value rank: 6/10
- Momentum rank: 6/10
Based on the above method, GuruFocus assigned Palantir Technologies Inc the GF Score of 60 out of 100, which signals poor future outperformance potential.
Palantir Technologies Inc: A Snapshot
With a market cap of $31.93 billion and sales of $2.045 billion, Palantir Technologies Inc is a significant player in the software industry. The company, based in Denver, was founded in 2003 and went public in 2020. It focuses on leveraging data to create efficiencies in its clients' organizations through its Foundry and Gotham platforms, serving both commercial and government clients. However, with an operating margin of -3.22, the company's profitability is a concern.
Profitability Concerns
Palantir Technologies Inc's low Profitability rank of 2/10 can raise warning signals for investors. This low rank indicates that the company's profitability is weaker than most of its industry peers, which could impact its ability to generate returns for shareholders.
Growth Prospects
A lack of significant growth is another area where Palantir Technologies Inc seems to falter, as evidenced by the company's low Growth rank of 0/10. The company's revenue has declined by -3.8 per year over the past three years, which underperforms worse than 76.39% of 2414 companies in the Software industry. Stagnating revenues may pose concerns in a fast-evolving market.
Conclusion
Given Palantir Technologies Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. While the company has a strong reputation in the software industry, its current financial and growth indicators suggest that it may struggle to maintain its historical performance. Investors should consider these factors when making investment decisions.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
