Palantir Enters AI Market with New Offering; Posts Strong Growth and Financials
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Palantir's products include Apollo, Gotham, Foundry, and the new Artificial Intelligence Platform (AIP) which enhances its offerings. AIP specifically targets the commercial sector.
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Revenue grew 20% year-over-year in Q4 2023 to $608M. Commercial revenue grew 70% in the US, showing strong expansion outside of government contracts.
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With the introduction of AIP, Palantir is entering the expanding artificial intelligence market expected to reach $225B by 2027. Integrating AI abilities has big future potential.
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Financials are strong, with 50% adjusted free cash flow margin in Q4 2023 and consistent revenue growth. Liquidity is good and debt levels are low.
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Using a DCF model with a 10% WACC, I calculate the stock is undervalued by 13.1%. Competition in the AI analytics industry poses risks, but Palantir seems well-positioned for further expansion.