Palantir’s Winning Streak Continues: A Defense Industry Powerhouse
A Month of Double-Digit Gains
Palantir’s stock soared 12.7% in December, capping off an incredible year of growth. According to S&P Global Market Intelligence, the company’s share price has been on a tear, driven by a string of new contract wins and a potentially game-changing partnership in the defense industry.
Defense Industry Wins Pile Up
On December 6, Palantir announced a partnership with Booz Allen Hamilton to accelerate U.S. defense technology innovation. Just days later, the company secured an expansion of its contract with U.S. Special Operations Command, worth $36.8 million over one year. The momentum continued with a major win on December 18, as Palantir landed an extended contract with the U.S. Army worth up to $618.9 million over four years.
A Next-Generation Defense Consortium
Reports emerged on December 22 that Palantir is teaming up with Anduril, an innovation-focused defense technologies company founded by Palmer Luckey, to form a next-generation defense consortium. This partnership has the potential to disrupt the defense industry and further solidify Palantir’s position as a leader in the space.
Impressive Business Performance
Palantir’s third-quarter results were nothing short of impressive, with revenue increasing 30% year over year to $726 million. Net income more than doubled to $149.3 million, and adjusted free cash flow tripled to $434.5 million. The company’s net income margin of 20% and free-cash-flow margin of 60% in Q3 demonstrate its remarkable profitability.
A Valuation to Consider
While Palantir’s growth prospects are undeniably exciting, investors should be aware that the company’s valuation is highly dependent on future growth. With a price-to-earnings ratio of 168 and a price-to-sales ratio of 52, there’s a lot of growth already baked into the stock price. This could lead to volatility if the company fails to meet expectations.
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