Palantir’s Valuation Question

Motley Fool Money

The Motley Fool

Business, Investing

4.4 • 3K Ratings

🗓️ 6 May 2025

⏱️ 28 minutes

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Summary

When a stock trades at 600x trailing earnings and 90x sales, its investors want to see a flawless growth story. (00:21) Sanmeet Deo and Ricky Mulvey discuss: - Palantir’s impressive business results and astonishing valuation. - Celsius’s “meh” quarter. - Why DoorDash kept growing after COVID. Then, (16:10) Cynthia Stewart, Executive Director of DART Collective, joins Robert Brokamp to discuss how AI is changing scams and how to protect yourself. Companies discussed: PLTR, CELH, DASH Host: Ricky Mulvey Guest: Sanmeet Deo, Robert Brokamp, Cynthia Stewart Producer: Mary Long Engineer: Dan Boyd Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, "TMF") do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	When you trade it 600 times trailing earnings, well, you got a high bar.
0:09.7	You're listening to Motley Full Money.
0:25.0	I'm Ricky Mulvey, joined today by Sandmeet Dea. San Mate. Thanks for being here. Good to see you.
0:30.0	Hey, good seeing, Rick. We've got some earnings to break down. The biggest story today is Palantir.
0:35.5	And there are two stories with this company anytime you talk about it. One is the actual business.
0:39.6	The second is the stock because expectations for this company are absolutely incredible palance here. This is the company offering artificial intelligence
0:44.9	platforms to the U.S. federal government and private enterprises. Some of its relationships with
0:49.5	the federal government getting it into some controversial waters lately. Not that CEO Alex Karp really
0:55.1	minds that. The other is the results. Let's talk about the results. Total revenue up almost 40%
1:02.5	year on year. Majority of that growth coming from the United States, net income up 24%. That net
1:08.2	income number, not sounding like a number of a company trading, it's 600 times
1:13.2	trailing earnings, but all right. And here is where some investors and traders have noticed
1:18.4	a little bit of pessimism, and that is international commercial revenue, which declined
1:23.1	5% sand meet. When you were breaking down the earnings here, what did you see in the actual
1:28.6	business results? I actually liked it. I thought there was a ton of great growth here. One of the
1:34.4	things I liked the most was that they just generated a bunch of cash flow. The cash for operations
1:39.6	were $310 million representing a 35% margin. Adjusted free cash was is $370 million, representing a 42% free cash flow margin.
1:48.1	I mean 42% free cash flow margin, but that's sink in a bit.
1:53.2	Alex Carp's commentary noting, as you said, Palantir is on fire right now, the rapid expansion
1:58.9	of artificial intelligence.
2:02.3	But when we looked at international,
2:08.2	that's where Europe is going through, quote, a very structural change and doesn't quite get AI. Maybe in the near future we'll get AI, end quote. So let's talk about that European story.
	...

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