Thread by @CapitalWiseman

Wiseman Capital #Research on Big Data and Analytics (BD&A) market - $120B TAM will benefit

Palantir $PLTR
Price: $24.04
MCap: $43B
52WKL - 52WKH $8.9 - $45
Earnings: May 4th 2021
Float: 1.36B Shares

$PLTR Palantir software seamlessly imports reams of structured (e.g., spreadsheets) and unstructured data (e.g., images and social media posts) into one centralized database, where it can be visualized and analyzed

$PLTR provides an “All-in-One” Solution in the $120B Big Data and Analytics (BD&A) Market, which is growing at ~12% CAGR to $177B by 2025

$PLTR: The BD&A market is highly fragmented.

$MSFT, $ORCL, $SAP, and $IBM account for 42%.

$PLTR has < 1% share

$PLTR: Long tail of 200+ providers make up just under 50% of the BD&A market
The Landscape of providers spans startups, service providers, software companies and large incumbents
This space has seen the most funding in new startups from 2013 - 2018

$PLTR: BD&A is #3 on the spending priority list for large global CIOs according to Morgan Stanley CIO survey for 2021 (March)

$PLTR: Each provider specializes in specific segments of the market and goes after specific customer pain points from infrastructure $SNOW $AYX $PLTR to applications $AI $CRM Tableau and cloud databases $MDB $CLDR $ESTC

$PLTR Palantir: Companies have to
a) Ingest,
b) Prepare,
c) Normalize,
d) Deploy and
e) Visualize

Data to gather Intelligence and Insights about their Business

The process to take “data” and convert it into insights and action involves multiple vendors but $PLTR has Products & Services across all steps
E.g., stocks: $AYX $SNOW $TLND $MDB $CLDR $CRM $ESTC $AI $IBM $MSFT $GOOG $AMZN $SAP $MSTR

$PLTR The bet on Palantir means customers prefer buying and end-to-end solution from one vendor over buying point solutions that are best of breed

$PLTR has 2 main products - Gotham and Foundry

Palantir’s Gotham is mainly used in the Government sector and is customizable, requiring a heavier services approach

$PLTR Palantir’s Foundry is commercial solution that is more standardized than Gotham, providing a more off the-shelf analytics platform

$PLTR Palantir customers use it for solving multiple different problems across industries and sectors, providing it with a robust set of solutions to bring to market

$PLTR Palantir recorded $1+B in revenue (<1% market share) for 2020 and is forecast to do $1.4B in 2021 (+45%), at 73% Gross Margins, which improved from 68% a year ago

$PLTR Palantir customer segments shows 53%/47% Government to Commercial, 40%/60% US to International with a total of 139 customers ending 2020

$PLTR Palantir pricing indicates a land and expand model, starting at $1M and averaging $5.7 Million per customer, with 139 large customers currently

$PLTR Palantir has a differentiated Go to Market Strategy with Forward Deployment Engineers – solving problems for accounts before they are customers

$PLTR Apollo a new solution to deploy solutions faster is their key to scale profitably and grow customers rapidly, helping $PLTR scale revenue to an expected $4B by 2025 from $1B+ in 2020

$PLTR’s LTV:CAC Ranks Among the Highest in Software

$PLTR’s Contribution Margins are Above Trend Relative to Growth and Functional Comparable peers in SaaS

$PLTR Business Model is three phases as grows its business:
(1) Acquire;
(2) Expand;
(3) Scale

with customers in Government and Commercial; in the US and abroad

Despite significant upfront costs, $PLTR contracts are usually up to 5 years in duration –cancellable with a typical notice period of 3-6 months

The Management Team has significant tenure at $PLTR but not enough public market experience

$PLTR Risks: Customer Concentration, Competitive Landscape, Slowing Commercial Revenues

$PLTR Comparable valuations reflect the growth and margins relative to peers is fair with growth factored in with increasing gross margin contribution

$PLTR Bull vs Bear Case shows strong visibility into revenues but slowing commercial revenue growth in Q4 2020 which we want to see turn a corner

$PLTR Institutional holding grew in 2020, but shows more selling than buying in March

$PLTR Summary:
1. Large Market $120B, but competitive landscape
2. Growing faster (41%) than estimates with increasing customer commitments (Land and Expand)
3. 30% CAGR in revenue growth expected from 2020 - 2025
4. Large lumpy deals makes forecasting quarterly revenue risky

Would appreciate your thoughts 🙏🏿
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