Sucker Punched Palantir
It’s time to follow up on Palantir Technologies (NYSE: PLTR) and this morning’s trip to the earnings confessional. But first … are any of you Great Ones familiar with Edie Brickell & New Bohemians?
What? Sure, the “What I am is what I am is what I am” band, right? What does that have to do with Palantir and the price of tea in China, man?
Well, there’s a line in their song “Circle” from their debut album that goes like this:
And that’s exactly how PLTR stock made me feel about Wall Street today.
No, I’m not giving up — I’ll never give up! You’ll have to pry Great Stuff from my cold dead hands Clint Eastwood style, Great Ones. Never fear!
What I fear, however, is Wall Street’s sanity. Just look at Palantir’s quarterly report. Look at it!
• Earnings per share: $0.04 versus $0.04 expected.
• Revenue: $391 million versus $385 million expected.
• Q4 revenue guidance: $418 million versus $402 million expected.
• Full-year revenue guidance: $1.53 billion versus $1.50 expected.
• Annual free cash flow: $400 million versus $300 million in prior guidance.
That’s 36% revenue growth in the third quarter from a year ago.
That’s 40% projected full-year revenue growth!
That’s amazing! But remember what you said this weekend?
Oh, I remember. I’m surprised you do, ya slackers.
In this Saturday’s edition of What’s The Deal With… I said: “The key to Palantir’s continued success is commercial revenue.”
You wanna know how Palantir’s commercial business is doing?
The company just reported a 103% spike in commercial business revenue, up from 73% growth in the previous quarter. Furthermore, Palantir added 34 new customers, up from 20 in the second quarter and just 10 in the first quarter.
And there will be more customers coming. Palantir is seeing strong adoption in the health care and mobility markets, and it’s rolling out new software to track carbon emissions and handle anti-money laundering compliance for cryptos!
Health care … climate tracking … cryptocurrencies … all tracked, categorized, data-crunched and analyzed by AI. To paraphrase Joey Tribbiani: “Could Palantir be wearing any more buzzwords?”
It’s utterly ridiculous how many pies Palantir has its fingers in right now. Its revenue growth projections are also simply off the wall.
So, it is with great confusion that I tell you that PLTR stock plummeted more than 9% following this blindingly stellar quarterly report. The question is … for the love of Warren Buffett … why?
According to Bloomberg, PLTR stock is falling because Palantir expects operating margins of 22% this quarter. Analysts expected operating margins of 24%.
I’m not buying it. Wall Street hasn’t given a flying fart about fundamentals for nearly two years now, and you want me to believe that — despite a wave of extremely impressive figures — a simple 2% miss on operating margins is why PLTR stock is falling?
Nah, son. I’m not buying it at all. If that 2% miss is the reason why PLTR stock plummeted 9% today … it’s not me who needs to “quit” or “give up.” It’s Wall Street and these new bohemian day traders.
You know why? Because Palantir is using that cash to hire 150 new salespeople. The company knows it can’t live on government contracts alone, so it’s spending on salespeople to help drive commercial business sales growth higher than the 103% spike we saw last quarter.
That’s where operating revenue is going: growth. And if Wall Street can’t see that … well, I have an NFT for oceanfront property in Arizona to sell them.
The bottom line here is that if you were on the fence about buying PLTR because the company was so dependent on the U.S. government for revenue … here’s your sign.
If you’re not ready to jump headfirst into the murky depths of Palantir’s data dominion just yet, don’t worry, I’ve got you covered.
What you’re looking for is “Digitarium.”
Right now, hardly anyone knows about this trend. But in just a few short years, “Digitarium” will become as common as the internet. While most Main Street Americans have no idea how big this tech will be, 916 of the Fortune 1000 companies are going “all-in.”
‘Cause GE’s back from the dead — electric’s comin’ back from the dead. And now it’s putting a hole in Wall Street’s head, judging by the century-old fogey’s latest news.
I mean, when was the last time you heard good news — any news — about General Electric (NYSE: GE)?
From washed up and virtually worthless back to the sudden shining spotlight, GE is about to be a whole new company — three companies, actually.
By 2024, GE will be split in three: one company focusing on health care, one on energy and one on aviation.
GE’s weak aviation and power businesses have been limping along for years now. And it was only a matter of time until the lumbering giant split up into more nimble business entities, like a blue-chip Voltron … but in reverse … or corporate horcruxes that make GE immortal. Shudder.
Anyway, after an uncharacteristic 16% rally, GE CEO Larry Culp shared more of his infinite insights, noting that: “It is a wow sort of day.” Much stock rally, very fast. Wow.
Mmmm … smell that, Great Ones? Weaksauce coffee, microwaved soup and half-burned/half-cold ciabatta bread — the catered brunch of champions!
No longer satisfied with local mediocrity, Panera Bread now wants to jam its tepid quiches down your portfolio’s throat, too.
Uhh, how’s that work exactly?
Through the magic of some funky SPAC action, obviously. USHG Acquisition (NYSE: HUGS) is helping Panera go public, leaving the JAB Holding umbrella just like Krispy Kreme before it.
And while I’m not a fan of eating there — stop playing hokey pokey with my caprese sandwich, dang it — I’ll admit Panera has a good racket going.
Panera has homed in on the sweet spot of consumers who don’t want to walk 20 feet and make themselves a sandwich but don’t mind driving 15 minutes to go pick up an overpriced one. Not to mention, the company’s started offering delivery options lately for all y’all who truly don’t want to pause the HBO binge. That’s … innovation.
Panera will never truly embody the spirit of the neighborhood bakery it wants to be … but it’s enough of a simulation to satisfy suburban taste buds. And that might be just enough to sell the SPAC.
By now, Biotech and pharmaceutical investors are no strangers to sell-offs.
Psychedelic therapy investors, even more so.
In its quest to cure treatment-resistant depression, Compass Pathways (Nasdaq: CMPS) somehow has fallen off course.
Compass released new trial results for its psilocybin-based treatment, COMP360, that were decidedly … mixed.
Nearly a quarter of the people given the highest dose saw their depression symptoms subside over three months. Other people saw no impact whatsoever while about a dozen of the 233 participants “exhibited suicidal behavior or thoughts, or who showed intent to harm themselves.”
Stifel Biotech Analyst Paul Matteis still sees the trial’s successes as a “positive outcome for the psychedelics space … but there’s been theoretical fears that the nature of the ‘trip’ might be beneficial for many but problematic for a subset.”
The Street saw the “ooh, positive trial data” first and sent CMPS soaring, but CMPS was bound for a rough come-down once investors digested the report’s overall uncertainty. The afterglow from the stock’s rally of the past few months turned into a creeping spiral of doubt and dread today as CMPS shares plunged 28%.
The bottom line here is unchanged: Psychedelic-based treatments are still a new direction for mental health and biotech researchers, and like any other treatment method, they have their pros and drawbacks.
As CEO George Goldsmith says: “This is not a panacea … People have such high expectations. And for some, this might be the last thing they think they can try.”
And with that, the whole shroom stock sector slammed into the dirt today, with Compass’s bad vibes spoiling the ride for everyone.
It’s So Meta, Even This Acronym…
Are y’all tired of hearing about the metaverse yet? No? I’m glad, because literally every social media and tech stock won’t shut up about this supposedly amazing new iteration of the internet. So … we’re diving into the virtual nether once more.
Nvidia (Nasdaq: NVDA) thinks you need more metaverse in your life — or at least the software tools needed to program and survive in the new, digital otherworld.
While the company-formerly-known-as-Facebook is using Nvidia’s chips to power whatever 3D worlds it’s concocting, Nvidia itself has something better in mind.
The company just announced a virtual world simulation and collaboration platform called “Omniverse Enterprise.” C’mon, this is too many -verses now … but it gets better. More buzzwordy. More meta:
You catch all that? Robot avatars in the 5G metaverse — what a time to be alive.
If the rest of the market hadn’t royally soiled itself, Wall Street might’ve kept NVDA’s 4% rally running longer, but nope. As much as Nvidia wants to leave this dimension behind, NVDA is still firmly stuck in reality, giving up all its gains by the close.
And as for the “metaverse?” Call me when you have a working Nerve Gear and a copy of Sword Art Online.
Today’s quoteworthy tidbit is brought to you by none other than rabble-rouser Robinhood (Nasdaq: HOOD) … seeing as it’s been, like, two whole weeks since the Hood roused rabble.
Oh no… Did Robinhood try to halt trading of popular meme stocks again? I saw some of those WallStreetBets stocks took off last week.
Not yet — but give it time! No, this week, Robinhood’s in hot water over a somewhat-serious-but-not-all-that-serious security breach that left millions of its customers exposed to a customer support hacker.
That’s right. Turns out Robinhood’s customer service team gets so spooked by someone actually finding and using the company’s help number that they’ll give out all kinds of personal information to any ol’ Joe off the street (but not me — I didn’t do it, promise).
According to the online broker, the person who committed the breach “socially engineered a customer support employee by phone and obtained access to certain customer support systems.” Tricky … very tricky.
Maybe Robinhood should’ve bought cybersecurity company McAfee (Nasdaq: MCFE) to help keep its customers safe instead of Advent International … but then again, that’s like the blind leading the blind. Or maybe it’s one of those cases where two wrongs make a right. Alas, the world will never know.
Anywho … Robinhood said the infiltrator accessed millions of customers’ personal email addresses and full names.
Roughly 310 people had more sensitive information compromised, while “approximately 10” had extensive information stolen.
Thing is, Robinhood didn’t tell anyone — including the millions of people whose information was taken by the hacker — that anything shady went down until last night … almost an entire week after the November 3 security breach.
Umm … thanks for that, Robinhood. A week in the real world is, like, a gazillion years in cybercrime land. That’s more than enough time for said interloper to sleuth around and steal whatever they want without going unnoticed.
And that, Great Ones, brings us to our true Quote of the Week — a statement issued yesterday by none other than Robinhood’s Chief Security Officer, Caleb Sima:
No $#!&, Sherlock. My contact, personal and financial data could’ve all been compromised, and you thought the right thing to do was wait a week to tell me about this “diligent” review? Hmm…
This is a company that shows us time and time again how little regard it has for its customers’ wellbeing. Do you still think Robinhood has your back following yesterday’s announcement? (That was a rhetorical question.)
Now, what really got my goat was what Robinhood said in its “security incident” email.
Instead of making itself more available to customers who likely have legitimate security and account concerns, Robinhood took the coward’s way out and hid behind — you guessed it — the support team that caused this whole mess in the first place:
So… If I go into the app and request a customer service call, they’ll let me leave a voicemail about my problems and then maybe they’ll call me back about it. Wonderful. I’m so glad we had this non-chat.
At this point, Robinhood’s “problems of the week” don’t even surprise me — I mean, your mind’s ability to handle states of shock and indignation can only go on for so long. But that doesn’t stop me from wanting Robinhood to just … I don’t know … do better for once.
Luckily, my ability to handle disappointment is much more advanced than Robinhood’s half-backed attempts to quell said disappointment in the first place.
What do you think, Great Ones? Did Robinhood go above and beyond to perform its civic duty and alert customers to its security breach? Or did the online broker do the absolute bare minimum that was required of it … and not very well, at that?
Tell me what’s on your mind this week: GreatStuffToday@BanyanHill.com. We’d love to hear from you! In the meantime, here’s where else you can find us:
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Until next time, stay Great!
Joseph Hargett
Editor, Great Stuff