Alex Karp Speaks on Palantir's Stock Price
In an interview with Fox Business, Alex Karp was asked about Palantir’s poor price performance. With the amount of new business deals, Fox business asked Karp to give clarity on the lack of share appreciation the stock has gotten over the last year.
“Real quick, on the stock Alex. You just announced last week, and we had one of your top executives talking about a multi-year deal with the platinum version of everything everybody wants to be in healthcare, the Cleveland Clinic. Now you've got another one with the Tampa Healthcare giant, Tampa General, you are out striking deals right and left doing exactly what a company dreams of doing. Yet it's not being reflected in the stock. I know you're going to say ‘We don't look at the stock day to day’ but how do you get, forget Wall Street, how do you get our viewers to say ‘you know what this one this one is one’?”
“Well, this is the thing you know, while Wall Street and other people ignore us, we're printing free cash flow, growing our client base. Disrupting the market in America, especially England and Canada. Winning the best partners like Crisis24, and of course the market shifts, and when they shift you're going to see a massive inflow of revenue. The deepest entrenchment of the most important products, products that can't really be built by other people. With the best partners, creating value, like with Garda, that can't be matched. That's why I'm very bullish on the long-term health of Palantir here.”
Wall Street doesn't get them, but the markets will shift, and when markets shift at that point recognition will happen. The reason markets will hypothetically recognize what is going on with Palantir when it shifts, when we get back to a bull cycle, is because Palantir is creating products that can't be replicated.
At the end of the day, these products that other companies can't just recreate.
While the market is down, Palantir is printing free cash flow, not profitable yet, they've got to get rid of that stock based compensation, continue to improve their adjusted operating margin and get GAAP profitability.
2025 is their target for profitability. The market loves seeing companies turn to profitability. If we are out of this global slowdown, and Palantir has had the time to clean out its business and turn to profitability. Simultaneously, these two things combining is likely going to mean lead to a world of difference for the stock price. Or at least that's what Alex Karp, the CEO and co-founder of Palantir believes.
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