As a former equity analyst, I would say that it's probably better just to ignore this analysis then read too much into it.
The performance of company's stock isn't based solely on whether the company reported a net income it's previous year; it's based on (imo) an ever fluctuating list of metrics, both controlled by the company (i.e. Return on Capital Invested, which net income is a component of) and not controlled by the company (i.e. cost for banks to borrow capital, future growth expectations, current market valuation).
I have a friend who graduated from WUSTL’s CS program, who suspected the lack of accreditation stopped him from numerous job prospects. While WUSTL was a cornerstone of the early internet, it’s never been known since (IMHO) for particularly strong CS.
Technologies: Python, Go, int Java/Scala/C#, Javascript (Node.js, Jquery, React), R, AWS, Azure, GCP, Hashicorp Terraform & Vault, Databases , Message Queues (RabbitMQ, ØMQ, Apache Kafka), Big Data (Apache Spark, Airflow/Kubeflow, Beam, Snowflake, Dask), Machine Learning/Natural Language Processing (Sklearn, Tensorflow, Pytorch, Gensim, NLTK, Spacy, ElasticSearch), Web Scraping, others
Résumé/CV: 13 years designing and building solutions in the Financial Markets, including Fortune 500 companies, Investment Managers, Hedge Funds, Venture Capital, Private Equity, and Data Vendors.
Developed cloud based web apps, data pipelines, market data systems, natural language text analytics, software/data architecture including micro-services, automation, network security/encryption, automated trading algorithms,and ETL systems;
- 13 years designing and building mission-critical software, data, and cloud solutions for customers in the Financial Markets, including Fortune 500 companies, Investment Managers, Hedge Funds, Venture Capital, Private Equity, and Data Vendors.
- Developed cloud based web apps, custom dashboards, distributed data pipelines, market data systems, natural language text analytics, software/data architecture including micro-services, automated trading, and ETL systems;
Obviously, I don't know what's going on at Palantir besides what I've read, but I know a few things about Finance.
A tax loss isn't necessarily all bad news. If you have a tax loss in one year, you might be able to use that loss to offset profits in future years, to minimize taxes for your business in those years. This technique is called a tax loss carry forward because it takes a tax loss in one year and carries it into a future year.
So, what they might be doing is using this as an opportunity to "throw the baby out with the bathwater," as the saying goes. Show a bunch of losses prior to IPO (setting expectations low), then show gradually improving operating results. Investors love this kind of "story" because the potential for stock to go down is less then if they were to show a booming business right off the bat.
Finally, just to make a point about investors not necessarily being worried about a company showing losses, all you have to do is look at Amazon, who for years showed loses.
If you grease up both candidates, your long-term success is not contingent on the current administration.
Since it's incredibly unlikely that an anti-surveillance, anti-warhawk, anti-police state candidate will ever become president, and it's incredibly unlikely that congress will be dominated by those sorts of folks, I think Palantir's business model is safe as houses.
> That is essentially a lobby-dependent business model with long-term success contingent on the currently elected administration.
Unfortunately these type of setups tend not to care who is in power. As the types in power are never against this type of company. Look at Democrat support for NSLs (Obama notably expanded use of them despite being against them while campaigning).
I may have missed this in the article but I don't think the S&M expense of $450M per year was broken out by Government vs. Commercial segments. That would be more relevant to the discussion to estimate the expense allocation between direct sales forces for gov & enterprise, pure media/advertising spend, and lobbying.
The magnitude of Amazon's losses are incomparable. Palantir losing half a billion in one year is significant. Amazon's loses were <$10 million in the mid 90's. [0]
The article's title gets straight to the point. "Why Amazon’s History Of IPO-Era Losses Means Little For Today’s Unprofitable Unicorns".
Palantir's revenue was $742 million in 2019, so it's relative. How is Palantir going to scale to 10x, 100x current revenue? Is federal spending going to balloon to accommodate that growth?
Amazon took a bite out of big-box retailers. They could grow by stealing their competitor's revenue streams. Palantir doesn't have that option, unless there are other equally giant contractors they can knock out.
What shocked me more than the loss was the honestly kinda ass revenue for their valuation. This isn't Uber with billions in revenue while losing in money.
>In the screenshots of the company’s financials, Palantir lists a net loss of roughly $580 million for 2019, which is almost identical to its loss in 2018. The company listed a net loss percentage of 97% for 2018, improving to a loss of 78% for last year.
Again, I don't know, but I'm comfortable speculating that it is (partially). The other obvious reason that I could think of is that Colorado is a very appealing location to live (for some people) and when you are trying to attract talent, it could be used as an incentive to get them to join the company. Another reason, could be customers located in the area.
I think here you need to look at their main weakness, which is strong reliance on government contracts. If Trump loses the next election then there will be a major change that will likely adversely affect them. Peter Thiel is one of the founders of Palantir.
And? Let's assume Trump loses, Biden wins. Do you have a specific basis to say that'll significantly change things for Palantir? Noting Thiel/Trump's relationship seems insignificant.
There'll always be entrenched national defense & security + intel bureaucrats who hold power, regardless if a Democrat or Republican is in office. Seems Palantir has at least spent a pretty penny building relationships with some of those folks.
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