Palantir Technologies: My Top Pick For The 2020s
By: David Gordon | August 29, 2021
• PLTR has a long growth runway ahead of it and could reach $25 billion in annual revenues by the end of the decade.
• A successful transition into commercial offerings will trigger massive demand for PLTRs unique data analytics software.
• PLTRs pricy multiple of 36x sales justifies itself by its revolutionary technology and its massive addressable market.
• PLTR has found its niche in data insight software and could grow into a big data monopoly.
As a growth-focused long-term investor, I spend my time attempting to identify undervalued companies with solid growth prospects and an expanding competitive advantage. I have perhaps never found a company as promising as Palantir Technologies (NYSE:PLTR). In my view, if management executes successfully over the next decade, PLTR could be to data analysis, what Google is to the search engine.
The growth catalyst that will propel PLTR from a $50 billion company to a potential half-billion-dollar market cap by 2030 is its aggressive transition to commercial software offerings. PLTRs first mover advantage should stave off meaningful competition over the next few years.
After analyzing PLTRs massive TAM and the high probability of a successful execution by management, I project PLTR to grow its top-line numbers at a 40% CAGR over the next 5-years, with growth slowing to an annualized rate of 25% over the next decade. Given this forecast of aggressive long-term growth, my DCF model values the company at $30 a share or 20% above PLTRs current market price...
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