Okay folks, so we got to give a violent update on the market and plays as well as the tear of Palin. I can't believe I'm saying this, but I think that Palantir may be a bit more of a tease than Mara. At least, Mara sometimes pleases Palantir, just teases. We need to discuss exactly my thoughts, the numbers that I'm projecting forward, which makes me continue to stay bullish on the stock.

And when I believe the number suggests this is going to hit a hundred dollars a share. And the only thing that I ask before we get into all this is that you hit that ravishing like button And also don't forget to subscribe either. Okay, so we finally got some breathing in the market, an inflation metric coming in a little bit hot, Tesla further leading a growth sell-off as Elon Musk's tweet storm got factored into the stock. You know, I actually have a picture of Elon Musk's tweet from last year hanging behind my desk.

Tesla stock price is too high in my opinion. That serves as a genuine reminder that sometimes Elon giveth and sometimes Elon take it. But in all seriousness, I mean, we need breathing, especially when it comes to Tesla stock. People want these things to run up forever, but they don't want to talk about the fact that you can't have it keep running up forever without having massive, massive corrections.

It's much better to have breaths along the uptrend. But we did have some good news with Evie go rallying as high as 19 in the pre-market on news that they were expanding partnerships with Uber and Gm. A bit of an overreaction, but I was pretty happy to see that hey, Evgo is worth more. It's going to be worth 20 in my view, but it hasn't earned it yet.

Mar had a strong uptrend to a new high in the pre-market before getting capital pulled with the rest of the market. lucid. Saw some pushbacks and momentum overall innovative and growth down, most things breathing today. Okay.

Lastly, I want to talk about Upstart. So Upstart's a play that we presented on in the 90s and I talked about why this is such a unique company with a very, very intriguing business model. I gave it a price target at 180 and then as I reevaluated some of their crucial segments and where they're growing, I upgraded it to 245. We had a lot of criticism for that, because it's like, hey, I can't make an argument for this above 245 and then day after day, it's run in 300, 330, 350, 380.

And just as an example, I'm certainly not always right, but just as an example of why it's so important not to upgrade something just because it's running. Today we had earnings and it coincidentally, almost fell exactly to my fair value price Target at 245.. It's fine to ride euphoria waves, but you can't trick yourself into believing that that euphoria is earned yet. And I said, hey, I'd be willing to upgrade Upstart if we get a massive, massive, beat on my earnings expectations for them.

Instead, they met my expectations for the 245 price target, but they didn't meet the expectations for the folks who bought in in the 400s, so it got beat down. That's the key with having a price Target. It's not relentlessly upgrading because the stock is going up. It's saying, hey, this is the fair value for the stock.

I don't care what the market thinks it's worth if it really really undervalues it, or really, really overvalues it. this is the true value of the stock, so I'm gonna bind four below it and I'm gonna sell out. Add it, or as it gets into euphoria mode. Just a small lesson there.

I have to learn that lesson as well. Sometimes it's just too easy to say. Okay, well, it's going up. That means you gotta buy more, but it's not worth more just because people are buying it and you have to make sure the market doesn't trick you.

Okay, Palantir So this was perhaps the most popularly watched retail stock in late 2020, early 2021. It's still one of the most followed, but it's found itself basically in the stagnating category since the growth crash from a general range of mostly 20 to 30 and just bouncing back and forth. And with today's earnings, this is now the fourth quarter in a row where we've had a dramatic beat on earnings per share and a slight beat on revenue, yet didn't seem to help too much. now.

Part of Palantir sell-off today was because of the Tesla-led growth crash, but still, you definitely had some of those momentum traders that helped with the preencipatory run. Take some profits. Now, if you haven't watched our Pltr videos before, or you aren't a well-versed palleterian, Well, the overly watered-down version of what Palantir does is that they offer software that helps aggregate data for large institutions and companies and helps drive better operational decisions. It operates as a software as a service model, and the idea is that if it does well with one client, that client will then go and use that program in more of its departments.

It's also true that it's very difficult for clients to then go and retrain for a different platform because all their employees are used to using this one platform or their whole system was fine-tuned around this one platform, similar to how Windows Vista or Windows Xp is still used in a lot of places, despite that being very, very outdated. just costs so much to adapt. So with something like a Palantir, once you're in that platform, you basically have that client locked down, and especially once they start expanding to a bunch of different departments. and the applications of their software are very, very widespread.

For example, they've been used to help in international supply chain routing and healthcare routing, and they're even credited with helping us find Bin Laden, But outside of that, there's a lot of big data analytics companies out there and there's a lot of competition. So the one thing that we have to see with these companies to actually understand the competitive edge they have is proof of concept: Are they getting more clients? Are those clients spending more money? And that leads us to the latest earnings report that came out this morning on earnings Today They said their Q3 revenue grew 36 percent year over year. But what was important about the growth trajectory is their Q3 Us commercial revenue growth rate accelerated to 103 percent year over year. Now if you visualize this, you have a revenue growth rate at four percent in Q4, 2020, 19 in Q1, then 28, and now 37 percent in this category.

This creates that exponential growth that we wanted to see in that last Talenteer video that we made from Q1 to Q3 of 2021. Alone, They've seen revenue growth of 44, adjusted for cash flow of 320 million which is 29 margin and adjusting operated income of 349 million which is a 32 margin total customers. And this is very important increase 20 revenue per top customer increased as well. So you're getting more customers and you're scaling the top 20 customers.

They also said they're seeing a lot of demand, specifically from the healthcare, automotive, and the defense sector. They're also looking to expand into crypto, but they did not mention Sheba. Unfortunately, I think that we can all agree that cheap is crucial for this nation's defense. Now, in terms of weakness on this report, the one weakness that I could find is that the government revenue was slow, but they are making up for it in deal volume and value in other sectors like the commercial sector.

Well, that's the only other sector, the commercial sectors. They're making up for it in the commercial sector. But anyways, it's hard to visualize exactly what's going on here, and I just threw a bunch of numbers at you. So let's go ahead and project growth on a spreadsheet.

Okay, so I'm going to go ahead and use the Ceo's estimated growth rates that he reiterated today over the next five years for simplicity's sake and assume the rates continue through 2030.. we'll adjust those later to factor in different projections that aren't aligned with the Ceo and my own projections. but I started from 2021's guidance that was released today at 1.527 billion dollars, which is an estimated 40 growth rate. And then I use their long-term guidance growth rate which they reiterated again today, an annual growth rate of 30 in revenue or greater for 2021 through 2025.

So you plug that in, you run the numbers of growth year over year. The formula calculates this level of revenue per year in each category, and with the shares outstanding, I assumed about three percent of dilution per year, which seems pretty reasonable given the amount of dilution and the setup with this company and warrants and whatnot, I would expect it to start going down dramatically. I would say two to three percent. And then I went ahead and put together three different categories for multiples: Fair value at 20 x sales, which given the compounding growth rate of the sector that it's in and pound years market share, I think 20 x sales is about reasonable.

I then declared 30x sales to be the euphoria multiple. and then because capital tends to over accumulate to any of the up-and-coming growth leaders in a sector, I went ahead and took an average multiple between the industries most noted and successful growth players: Dated dog and Snowflake Datadog trades at a 60 multiple Snowflake trades at a 128 multiple. In the case of Snowflake, the multiple's so high because investors are rallying it up on expectation that a lot of the booked value is going to start showing on future revenue reports. However, I'd also argue that with Palantir, you're not seeing a lot of the future contracts being factored into the stock at all.

It's pretty much just factoring in the growth trajectory and not an increase on the growth trajectory. This multiple is just here to compare. I'm not saying that Palantir is going to reach these values. In any case, assuming company giving growth rate some dilution, you're looking at a fair value at 16.33 based on 2021 sales, 20.61 cents based on 2022 sales, 26 and two cents based on 2023 sales, and then 32 and 84 cents based on 2024 sales, and then eventually it scales up to breaking that 100 barrier in 2029 assuming 30 revenue growth year over year.

People who trust this company's estimates are averaging out and setting a fair value on the stock today at about 2023 sale numbers, which values it at about 26, which is pretty in line with what it's trading at currently, give or take a couple dollars. After today's crash, the market right now is looking at 2023's numbers and it's saying okay, well, that's about 26, the fair value is 26, and it's kind of going back and forth around there, but as we head into 2022, it'll start looking more towards 2024, closer to 32 dollars a share at fair value. However, I think the market's making a big mistake here and I'll explain why the company expects 30 or greater growth, emphasis on the greater, and the market is factored in a bare minimum scenario of 30 every single year. And worse yet, using this formula completely ignores the fact that you could have some years they come in far above that, and some years they come forward below that, because if it's an average over those years, you have different reports on different years.

you could have one year where it's 50 in other words, 20 and it could come out to an average in the situation, you'd expect higher growth rates in the next coming years, and then slower growth rates as you get closer to 2025.. And these are the numbers that I picked to draw a trajectory of a broader trend. These aren't necessarily what's going to happen, but this is what I think the broader trend is going to look like. You have 40 in 2021, you have another year of heightened growth in 2022, and then growth rates as a percentage start going down as company gets more mature, and then it steadily trends that way until 2030..

Which based on these numbers, you earn 100 per share a year earlier than you did based on the company's numbers, and you earned that in 2028.. But most importantly, in terms of current pricing, this is my thought process. The market again is looking at 2023 numbers right now based on the wrong metrics. and it's valuing today's stock based on those wrong metrics.

And based on this trend, If it was accurately priced today, it would be somewhere between fair value at 31 and U4 yet 39. And I think that what's going to happen is halfway through 2022, Palantir is going to be reporting and providing guidance. Analysts are going to realize hey, hey, we messed up. Palantir had two great quarters and Valentine's guidance suggests that by the year end, we're going to see growth rates that are closer to this.

Not this, they're going to hit that higher growth rate in 2022, But by mid-2022 what's the market going to be looking at? It's not going to be looking at 2023 anymore. It's gonna be starting to factor in 2024 and 2025. There's going to be a large discrepancy between how much growth is going to stack up in 24 and 25 and how much they factored in in mid-2022 If it hits these growth numbers, the new fair price would be trading somewhere between the fair value in 2024 at 42 and the euphoria multiple in 2025 at 69, just under 70.. Now of course, the risk associated with this is in a world where you get a really bad 2022.

Obviously the value creation is delayed a year or 18 months, but Palantir has already shown during 2020 that it can make up for some lost revenue and rebound faster on the other end. And given a few risk on cycles and really strong beats with volunteer, I would not be surprised if you see this trading several periods in the euphoria stages. Basically, my thought process is, hey, right now the market's looking at 2023 levels and the 2023 levels are wrong. The rather, it's going to be higher in 2022 and that's going to project higher in 2023 numbers.

And by the time the market realizes that it's already going to be mid-2022 and so it's going to have to rush to try to price in 24 and 25, which is going to put it much closer to these values and I could end up being wrong. But when you ask Charlie, why are you bullish on pound here? Well, this is why Because I think that their growth numbers are going to look like this, and even if they don't, they're still going to create a lot of value over the upcoming years. I think this is a stock that requires patience, but the numbers make sense in my view anyways. folks that gaps off the video.

If you have any questions, feel free to reach out to us below or join us on Ziptrader Snorkel if you'd like to learn how to trade. With our private chat, our daily morning briefings, as well as our step-by-step lessons where we will walk you through everything that you need to know in order to learn how to better trade and manage your account in the stock of market, Well, we'll go ahead and put a link to Zip trader you below. This is not the type of course where you can buy it and get away without doing any work. This is something where you're expected to put a ton of work in and effort to get any sort of result when I buy something.

You better bet that I get every single dollar worth out of it. I expect the same from you. Anyways, have a good one and I'll see you in the next video.