DA Davidson's Gil Luria on Palantir: No other company is growing at this rate
Speakers
Gil Luria
— Technology Strategist at D.A. Davidson
Summary
DA Davidson's Gil Luria discusses Palantir's Q1 earnings, highlighting its exceptional 85% growth and 60% operating margins but noting the high valuation at 80-90x cash flow. He explains the strong government and commercial demand drivers and suggests the business's momentum is likely to continue despite muted stock reaction.
- Palantir reported Q1 earnings with 85% revenue growth and 60% operating margins at a $7B run rate.
- Gil Luria calls Palantir a 'universe of one' with no comparable company.
- The stock trades at 80-90 times cash flow, making it hard to surprise investors.
- Government business accelerated, partly due to defense targeting tools used in conflicts.
- Commercial business sees strong inbound demand, doubling without needing salespeople.
- Luria maintains a neutral rating on Palantir but praises the company's performance.
- The stock was little changed after earnings, reflecting already high expectations.
- Luria expects the growth trajectory to continue for the foreseeable future.
Trade Ideas
Palantir is unique but highly valued.
Palantir is a unique company growing 85% at 60% operating margins on a $7 billion run rate with mostly recurring revenue, which no other company can match. However, the stock trades at 80-90 times cash flow, creating high expectations that are hard to beat, so the stock doesn't react much to earnings. Nonetheless, the business is phenomenal and likely to continue growing rapidly, making it a remarkable but highly valued story worth monitoring.
