Palantir will Pivot into Healthcare in the 2020s

Palantir's Stock woes continue but its pivot into Healthcare is just beginning.

Palantir will Pivot into Healthcare in the 2020s 

Palantir's Stock woes continue but its pivot into Healthcare is just beginning. 

Hey Guys, 

Some of you may remember me from the wordpress The Last Futurist. Well, I'm back. I'm starting this Newsletter with 0 followers. 

So let's get into it: 

Karp joined Palantir as CEO in 2004. Palantir Gotham, a software platform which enables users to identify patterns hidden deep within datasets I think will be able to add value to the future of the Healthcare AI industry. Inspite of poor Q2 Earnings and weak guidance, think about the future of healthcare and data. Palantir is surprisingly well positioned. 

So how could Palantir's future as a Big Data analytics company scale well with the future of Healthcare?

It badly needs to diversity from National Defense and Healthcare is the biggest TAM around. 

As healthcare slowly becomes more data centric, personalization driven and influenced by AI, genomics and unified data, Palantir's unique value proposition becomes much stronger. Finding the patterns in the data in healthcare will eventually be very lucrative. 

I would get in on the stock below $5. The market cap is $16 Billion now, that's still far too rich. $PLTR 

Alex Karp's vision for the future of the company is surprisingly sound. 

As U.S. commercial customers scale, I'm more bullish on this company becoming profitable. The Commercial segment serves customers working in non-government industries. 

It's 52-week low is $6.44. $10 is too much after this Q2 miss which felt substantial and as confidence in the company has been on a downward trajectory for some time. 

Always go to the source.

I used to think that Palantir was little more than a meme-stock. But as it evolves it proprietary tech I'm starting to see a better future for it. 

Q2 2022 Highlights

  • Revenue grew 26% year-over-year to $473 million

  • US revenue grew 45% year-over-year to $290 million

  • Commercial revenue grew 46% year-over-yearUS commercial revenue grew 120% year-over-year

  • US government revenue grew 27% year-over-year

  • US commercial customer count increased 250% year-over-year, from 34 customers in Q2 2021 to 119 customers in Q2 2022

  • Total contract value (“TCV”) closed of $792 million, including US TCV closed of $588 million

  • Loss from operations of $(42) million, representing a margin of (9)%, up 3,000 basis points year-over-year

  • Adjusted income from operations of $108 million, representing a margin of 23%

  • Cash from operations of $62 million, representing a 13% margin

  • Adjusted free cash flow of $61 million, representing a 13% margin

Q2 2022 TTM Highlights

  • US revenue of $1.04 billion on a trailing-twelve-months (“TTM”) basis

  • Cash from operations of $292 million, representing a 17% margin

  • Adjusted free cash flow of $314 million, representing an 18% margin

The way healthcare, telemedicine and AI in healthcare grows in the next decade means Palantir understands where it can be most valuable to people and society. That is began in the National Defense sector will be a bit ironic as compared to what it becomes. 

Demand for Palantir's services will be higher as the U.S. becomes a more data-centric society. This will be a very gradual process in the healthcare and other commercial sectors. 

Peter Thiel and Alex Karp started Palantir almost two decades ago to sell software to U.S. government agencies and their allies. The will have a legion of sales people that will grow and scale the company through the 2020s. 

I find the future of healthcare aspect of their business model very compelling if it is true. 

We are just at the beginning of a major revolution in Healthcare, as my coverage of AI in healthcare trends can attest to. 

Alex Karp has paid his dues and in the 2025 to 2030 period it could really prove to be something. 

As they diversity their business model into commercial clients the revenue will start to look different. I believe the Healthcare segment could increase their growth at a certain point as the industry matures along with AI as a Service companies like Palantir. Data analytics will also evolve. 

If you decide to invest in this company, please understand what these are: 

  • Gotham

  • Foundry

  • Apollo

The growth story for Palantir I believe in intact. 

They anticipate that the proportion of their revenue coming from customers based in the United States will continue to rise, even as their growth in Europe and other international markets accelerates.

Palantir paints a picture of significant growth potential. 

At Palantir the YOY growth story is better than I thought too. 

Palantir Technologies Inc. shares fell as much as 15% after the data software company forecast annual sales and profit that fell short of analysts’ estimates. They need to fall significantly further to peak my interest but this Earnings report had a lot of stellar info. 

Palantir ended the second quarter of 2022 with $2.4B in cash and no debt.

Government agencies use Palantir software for intelligence gathering, counterterrorism and military purposes. In addition, the software maker aims to expand into the health care, energy and manufacturing sectors.

  • Healthcare

  • Energy

  •  Manufacturing sectors

Palantir can grow its commercial, government and emerging commercial sectors essentially all at the same time through the 2020s. 

For this reason I'm bullish on the long-term prospects of this company.

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