Palantir has been successfully shifting its revenue stream from government contracts to large business subscriptions. As a result, increased profitability could position Palantir in the next 12 months for one of the largest ever private tech IPOs, according to a new report from SharesPost.
Since 2017, Palantir has added new products and new customers, while expanding its geographic footprint and forming new strategic partnerships. As a result, the companys enterprise business will likely account for more than 50 percent of overall revenue, a critical threshold as it approaches a public offering.
Palantir is benefitting from the strong, global demand for Business Intelligence (BI) and data analytics solutions, said Managing Director Rohit Kulkarni, Head of Research for SharesPost, Inc. Data increasingly powers the growth of large, sophisticated organizations, and Palantir stands to gain significantly from its leadership position.
From a valuation standpoint, recent comparable IPOs of Big Data/Analytics firms have traded in the range of 7.0x to 8.0x of one-year forward revenues. At the same time, the valuation multiples of Big Data pure play companies such as Tableau and Splunk have also risen over the past 12 months.
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For Palantir to maintain or improve its last known valuation of $20 billion as it enters the public markets, the company needs to achieve either/all of these metrics: 1) 2019 net revenue at or above $2 billion; 2) 2019 net revenue growth rate exceeding 25 percent; 3) gross margins approaching 70 percent or higher; and 4) positive free cash flow.
About SharesPost, Inc.
SharesPost is a FINRA-registered broker-dealer, SEC-registered Alternative Trading System (ATS) and Registered Investment Advisor. SharesPost helped launch the secondary market for private tech companies in 2009 and has built the leading platform for secondary transactions and digital securities. SharesPost provides the private tech asset class with a suite of trading and lending solutions to facilitate shareholder and option holder liquidity. With nearly $5 billion in secondary market transactions in the shares of more than 250 leading technology companies, SharesPost provides the trading, research and online tools to transact in the private market with confidence. SharesPost has trading operations with licensed brokers in San Francisco, Menlo Park, and New York City. For more information, visit sharespost.com.
Any securities offered are offered by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost Inc. Certain affiliates of these entities may act as principals in such transactions.
Investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.
Cautionary Note Regarding Forward-Looking Statements
The matters described herein contain forward-looking statements. These statements include, but are not limited to, statements about research on late-stage, venture-backed companies. SharesPost cautions that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements involve a number of risks, uncertainties or other factors beyond SharesPosts control. SharesPost undertakes no obligation to release any revisions to any forward-looking statements.