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팔란티어 실적 호조(4분기 매출 +20%, 연간 +177%, AIP 부트캠프로 고객 확보 가속)와 높은 마진을 근거로 매수 관점을 제시. 다만 이자수익 의존, 조정 수치, 20배 EV/매출 밸류에이션은 경계 요인으로 언급. DCF 기준 내재가치 $14 대비 주가 $23.6으로 고평가, 성장률 가정 상향 시 $25.6로 소폭 저평가 가능성 제시.
다듬은 글
so look at the smile on Alex cser's face so this is probably how most pentier investors feel after feeling Vindicated and being proven right on their thesis on palentia being the superior AI company right after this most recent earnings so if we were to just take a look in the previous price action over the last 5 days palente is up a warping 4.68% and on the past one year it's up a grand total of 187% yes you have heard it right 187% so what exactly transpired over the last one year or so let's investigate closely in the most recent earnings report and before we begin on behalf of piran profits I'd like to wish everyone a prosperous and healthy Luna New Year and that all of you will keep winning in a stock market in 2024 I think this is just very brief overview and the most recent quarter ending December of 2023 on the top line they've grown their most recent quarters Revenue by 20% year on year and on a full year basis they grew it by 177% on the bottom line I think they also have very spectacular margins to show to investors income from operations 11% margin adjusted income from operations 34% adjusted free cash flow margin 50% adjusted iida 36% so these clearly screams to investors that hey plena is a software company at its core and they're able to print such monstrous margins in comparison to even their big Tech counterparts now moving on to several highlights that they actually posted so us commercial Revenue which actually slowed down significantly over the last two or three quarters has regained some sort of Vitality and they are currently up 70% year onye to 131 million they essentially close 103 deals over $1 million and it is 2x the number versus a year ago and in terms of their us commercial customer count they actually grew 55% year on year and 22% quarter on quarter and more importantly they've achieved the fifth consecutive quarter of Gap profitability and GAP means generally accepted accounting principle with a 15% margin so there's probably very little things to nit pck in Pena's most recent earnings results but I think we should go back to the heart of the problem to identify where palena stands in terms of the economic today and is the results that they produced in the most recent quarter actually sustainable or not they essentially blew expectations out of the water they delivered revenue of 68.4 million versus the 602 that was expected and the foure guidance is between 2.65 to 2.67 billion and if you to compare it on a year-on-year basis it's up around 19% now I think here's the game changer for pentia in the most recent earnings quarter it's essentially this idea of an AIP boot camp this is just a quick context of it so AIP is basically benta's artificial intelligence platform and why this boot cam is a game changer because according to Pena's disclosure they allow for existing or even prospective customers and client base to arrive at a use case within 5 days and this allowed them for Hands-On keyboard experience allowing new customer customers to build alongside palentia engineers and to really understand how to apply AI develop initial use cases and to onboard and train their own model and to essentially lower this first hurdle and allow for these Enterprises to get their first win and to see how impactful and how important penus AI software is so this is a radically new approach to acquiring customers and it's stly different from the initial strategy of employing a huge Salesforce so I think this new approach is creating seismic waves and the entire data analytics industry and it essentially shows in the results Pena has closed 103 deals that are more than $1 million in the latest quarter and they have over 560 bot camps conducted in the last four months and I think one of the most important kpi of this boot camp is showing in numbers it showed in the accelerated acquisition in customers so Q4 of commercial Revenue growth plus 32% year on year us commercial Revenue growth plus 70% year on year that customer count increased from 143 to 221 on a trailing 12mon basis and their total commercial customer count on a trailing 12 month went from 260 to 375 and that's a 44% year-on-year growth rate and to add icing on the cake Alex car who's the CEO of palena said that the demand for LLS which are large language models continues to be unrelenting expansion and growth have never been greater and this essentially instills lots of excitement and confidence idence to the investor base basically echoing the thoughts that we are at the start of this AI adoption S curve now general cost controls are okay sales marketing General and admin expenses actually grew at a slower Pace compared to revenue growth they also put in continuous effort to build out their R&D which is essentially the lifeblood of pentia and it's the economic mode that cuts the business so stock based compensation did slow significantly at around 15.7% year on year more importantly they also have a very strong balance sheet with around $ 3.67 billion in cash and $746 million in current liability now moving on to the not so good points that I think serious investors should continue keeping a lookout for so firstly I believe that this entire AIP boot cam is indeed a game Cher in order for them to structure and come up with something like that they probably understand the pain points of a prospective client and in the entire client acquisition funnel the first step of all this prospective client are probably the greatest challenge so by being able to bridge across this information Gap and this knowledge Gap it allows for much smoother transition for them to commit to many of these multi-million dollar contracts so two things that investors need to take note of they need to continue monitoring this acceleration and ensuring that what palentia is doing in terms of customer acquisition efforts continue scaling and continue answering many of these pain points and number two although customer acquisition is important but it's just first half of the equation they need to also focus on retention EMP palentia is a need to prove to investors that they're able to acquire at skill and retain at skill and on point number two um is just a personal opinion I'm just a tad bit allergic to many of these adjusted figures even though I understand that pentia is currently at their early stage of development and essentially in their growth stage and of course the push back to this argument is that you want employees to have huge skill in the game and you want to reward them handsomely so they can attract the top talent and in fact the trend of share based compensation has been going down over the last few quarters so this is um exciting signs and on the point on adjusted figures the income from operations is actually 65.8 million but if you to add back the share base compensation the adjusted income suddenly goes up to 209 million um suggesting that they have a 34% margin and if it to actually peel the layers and judge palentia purely from the income from operations without the share base compensation I think this margin is closer to 10% on another note I think the interest income is also propping up the bottom line by a very large extent so let's also not forget pantea is a tech company at least that's what most people like to know them of and their Q for interest income is 47.7% of the net income and the full year for 2023 is 63.2% of the net income that it I believe this downtrend is going well as their Core Business continue printing cash and that's also because they're holding a huge amount of cash on their balance sheet which is $ 3.67 billion worth of cash and cash equivalent it also probably signals to investors that hey we are ready to go for war we have a huge balance sheet to weather any storm ahead but that's it I believe that as a Growth Company um they should be reinvesting at a much higher rate internally with greater potential and last but not least of course the revenue guidance by management team is coming in at right around 20% a far cry from the previous 30% growth rates that many people were expecting so we kind of have to just our expectations and to project forward so the biggest question on most investors Minds right now is Pena or buy so I think a question that I like to ask most investors is in the next 5 to 10 years what w change so firstly I believe that private Enterprises will always want to one up each other this also suggests that they continuously want to drive profitability and to drive efficiency so this translates to a great transition towards integrating and using AI for their business capabilities so as to one up each other and this is a huge Tailwind for Pena's core business so time will determine if pentia is the player that is going to capture most of this market share and if so if they're able to prove their capabilities and superiority in terms of their product offering they will then be the goto platform for AI integration and this is going to be the core of the business the mode of the product let's ask ourselves how do we value pener today I'm going to use two specific approach in terms of valuing P one it's your traditional DCF approach and number two I'm using a relative valuation so I understand that using a traditional discounted cash flow model might not be the most appropriate especially for a young company in their growth stage like Pena's case however I think the underlying mental model around using a DCF is simple you are basically discounting all future expected cash flows and by using a DCF model allows you to have a few and a greater appreciation of the expected cash flow to come for 510 or even 20 years out and essentially what is being priced into the valuations today so this is essentially called The True Value Finder by piran profits and I'll just quickly walk you through on how you can essentially use this model itself so you basically just put in the name of the stock and the stock symbol and you just need to input a few variables before the model actually spits out an intrinsic value what you need is essentially six variables firstly it's the operating cash flow on a trailing 12mon basis secondly it's the debt profile usually the short-term and long-term debt thir L it's the amount of cash that they have on their balance sheet fourthly it's the Assumption on your growth rate for the cash flow from year 1 to year 20 fifth it's the total number of shares outstanding and number six which is the discount rate so I'll quickly walk you through how to use this model first let's look at the operating cash flow this is the figure on a trailing 12mon basis that they provided and I believe that this is an adjusted figure because they have to compensate for the huge amount of share based compensation but let's just presume that pante is able to generate this amount of cash flow moving forward and in terms of the debt structure um I believe that palentia does not have any short-term or long-term debt so this $29 million is essentially the customers deposit on their balance sheet so they have $ 3.67 billion worth of cash which is crazy so in terms of their growth rate I think it's up to anyone's guess but at least based on Alex Cup's commentary um he seems fairly confident in terms of the demand and uptake of um balers call offering so having a 20% year-on-year growth rate in the upcoming three years I think it's no problem for pentia so I did extend this 20% growth rate from year 1 all the way to year 10 because I think we have to understand that pantea is currently in their growth phase and um this current operating cash flow of 712 million might not be their full potential as they have not yet achieved a great amount of skill to kind of boost their margins but of course I still have to work with a number so that's why I expect pantea's growth rate to continue extending at 20% year on year for the first 10 years and right after that for the subsequent 10 years um they're just going to grow right along GDP figures just a little bit more so the number of shares outstanding you can quickly Google it and in terms of the discounting rate using 88.1% because palentia do have a beta of more than 1.6 times so that's why we use a discount rate of more than 8.1% um some of you might ask how do you find the beta figures um you can just Google Yahoo finance pentier and you get the figures so long story short after giving in the inputs of this six figures the model actually spits out an intrinsic value of $14 and 13 and based on the time of this recording palena actually closed at around $23.60 per share so and that's essentially a premium of 67% so I know that this might not be extremely representative of Pena's real intrinsic value because on primarily two fronts number one I think in terms of the operating cash flow which is the starting figure it has a very very important impact in terms of how we reach to this valuation to give you an example because now we are using 72.2 million let's say we are are using $1 billion instead so at $1 billion starting operating cash flow you can see that the intrinsic value is at $19.24 palente actually is only overvalued by 22% so why is there such a huge disparity probably because palente is not matured enough and due to the nature of their maturity the margins on their operating cash flow might not be representative of the business so that's on point number one and on point number two it's of course the expectations of the growth rate on the cash flow so let's not forget currently we are only at the start of this entire AI curve so similarly to Nvidia for those of you who actually followed them you saw that there was an explosive growth rate to the upside because they essentially reached that critical inflection point so I'm not guaranteeing that bente will see that same inflection point but I'm just suggesting the potential of palena being one of the key important players in this entire industry and they might be experiencing this sort of explosive growth rate as well if assuming that that explosive growth rate comes in the subsequent 5 Years From years six to year 10 and I just put a 30% growth rate you can see that the intrinsic value per Shar is actually jumped to $18 starting the model at $1 billion operating cash flow and using this Assumption of 20% for the first 5 years 30% for the next 5 years you get an intrinsic value per share of $25.60 and that might even warrant pener a buy today because it's basically undervalued by around 8% so I think this exercise of a DCF model really allows you to have a greater appreciation of what the market is basically trying to PR in today so that you can play with the different assumptions and to get to a place where you're comfortable buying at valuations because you're comfortable with the assumptions that being priced into the stock so I hope that this explanation is simple and clear enough for you and for those of you who are interested in the True Value Finder provided by panana profits we are currently running a promotion and I'll leave the link in the description box down below for those of you who want more details around the True Value Finder now moving on to the other two valuation approach um it's under the umbrella term which is a relative valuation basically you are trying to compare how palena is standing amongst its peers and amongst its own historical comparison so this screenshot is actually grabbed from Guru Focus so they actually pitch pentia against their other SS competitor like 40 net clout flare crop strike and Splunk so you can see that pantea is this green circle over here so it's not necessarily the most overvalued but it's also not very undervalued per se um comparatively speaking so they essentially comparing them on the EV to revenue multiple so EV is Enterprise Value basically it's the market cap less cash at debt to essentially account for the capital structure of the business and it's a more sophisticated way compared to price to sales which doesn't really account um for their Enterprise Value and their capital structure palena is a 20 times EV to revenue while there are some trading at EV to revenue of more than 20 times While others actually trade less than 10 times so I think if you to ask me is pent expensive or not compared to its competitor I think this is not not very telling because firstly and the competitors are not really in the same space as palentia because I believe that crop strike and foret they are in the cyber security space moving on to compare palentia from its own historical perspective on an EV to revenue multiple as well they're currently trading right around um 20 21 times and the median is 15.5 times and let's also not forget when palen was in its lows between the $6 to $10 Mark they were trading much closer to 6 to8 times EV to revenue and and that was arguably in hindsight the best time to accumulate Pena right now at over 20 times EV to revenue personally for me I do think that it's a tough pill to swallow but that's just my own personal opinion so I think generally here's the bottom line for palena the investment case for palente is still the same so do they have a superior product are they able to continue achieving scale so there is um certain commotions around Pena being a consultancy company so uh comparing a consultancy company versus a sess company it's a very different growth trajectory and if palente is able to continuously prove to investors that they have the ability to scale then they definitely command a much higher premium and of course their offer has to provide so much value that competitors cannot ignore for now it seems like they have been ging a lot of grounds in the healthcare space and they're onboarding more and more HealthCare Partners which is a good sign to start and bente have to continue improving and innovating on the products and services and ultimately it has to translate into numbers given that they valued today I believe that many investors are expecting a lot do feel free to leave in the comment section Down Below on what you're expecting of palentia and feel free to smash that cute little like button and subscribe as we provide more updates for you in the coming future with that this is CK from piran profit signing off till next time keep winning
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