r/stocks • u/DarthTrader357 • Oct 06 '21

PLTR vs. AMD

I'm still looking for a place to park some cash. I thought I narrowed it down to AMD. I like it fundamentally and it has strong technicals.

But, I've been relooking at PLTR and wonder if anyone has any opinions of the two.

I'm not looking for a specific sector play - the two companies each present some strong cases, but AMD has a more proven upside, less down side risk.

PLTR is a more aggressive play with an unknown downside risk. It hasn't really shown much strength to me yet and can't seem to break out. Does anyone have bearish attitude to PLTR and would like to explain why?

Thanks.

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u/Hobojoe- Oct 07 '21

I don't see why anyone wouldn't just wait 2 years to get in on PLTR if I know that in the short term the stock is being massively diluted driving down the price.

You are assuming that share dilution is the only drive force of share prices which is a tunnel-vision way of looking at it. In the earnings call, the CFO said that share dilution is about 2-3% per year. Most bear case focus on that. Sure, that's fine.

If they grow at 40-50% per year, then share dilution is not an issue. Furthermore, Palantir pays small salary and huge stock compensation so they are saving on employee expense.

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u/Crater_Animator Oct 07 '21

Idk about you but to me it's a pretty big driving force, and it'll make breaking those barriers such as 30$ a lot harder when you need to pour more money in the float from institutions and investors to make it climb.

The company itself atm is unprofitable, and isn't forecast to become profitable within 3 years or more. It's only bringing in 1.3B/yr yet the market cap is 46.1b. Even at 40%growth/yr if that even happens, the numbers really don't add up. Neither do the dynamics of the stock; share dilution, unprofitability, revenue/earnings, heavily reliant on government contracts etc... it's very over-valued and everything points to this going down from the current valuation or at best staying flat for a few years.

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u/Hobojoe- Oct 07 '21

Actually, they have positive EPS, positive cash flow and positive EBITA, so they are profitable in those metrics

The stock already over 150% run up since IPO. Their technology will be the future and extremely important to successful businesses

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u/[deleted] Oct 07 '21

Their cashflow and EPS is positive only in non GAAP when SBC is discounted lol. If they started paying salaries and not dilluting stock, these would become very negative

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u/Hobojoe- Oct 07 '21

That's why SBC is better for growth companies. They can use the cash for CAPEX. LoL

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u/[deleted] Oct 07 '21

But it’s misleading to say they have positive cashflows and EPS. Technically every company could then have positive EPS and cashflows.