What level is Palantir’s enterprise value and is it likely to double in the future?

What level is Palantir’s enterprise value and is it likely to double in the future?

The current market cap is $410B and what numbers need to come out to be in the $1T club?

First of all, the next five years are estimated by considering the growth rate of a very average growth company by referring to the recent guidance.

Estimated Year Home Growth Rate FCF

2026E +30% 2.47B
2027E +25% 3.08B
2028E +20% 3.69B
2029E +15% 4.24B
2030E +12% 4.75B

It doesn’t look that high.
Under the assumption of a 10% discount rate and 3% permanent growth rate (terminal)
Cash and liabilities are net cash (+). See level of cash equivalents ~$6B in 25 years.

• Enterprise Value: Approximately $56.81B
• Equity Value: Approximately $62.81B

Currently, only 1/6 of the market capitalization comes out.

In order for the company to reach $1T

Forecast for 2030
》 P/FCF Multiple
》 FCF required to achieve goals
》 Sales required (assuming FCF margin of 50%)
》 5-Year Annual Average Growth Rate (CAGR)

60x (maintained current level of overvalued) $16.7B / $33.3B / ~52%
50x (value down slightly) $20.0B / $40.0B / ~57%
40x (normalized to mature enterprise level) $25.0B / $50.0B / ~65%

It should be a scenario like this.

The current $4B turnover should reach a minimum of $33.3B after 5 years.
It is not possible to achieve $1T within five years simply by ‘growth’, and it is a ‘high-level equation’ that is possible only when the three conditions of explosive growth, high profitability, and premium valuation are combined simultaneously and perfectly.

To achieve this, high growth in the following areas is required for business.

1) Growth Engines: The Overwhelming Spread of AIP Platforms Is Essential
Must maintain ultra-fast growth in the U.S. commercial sector. This is the key driving force behind the current growth.
The ‘taste’ experience through the AIP boot camp must be quickly and extensively transformed into a real ‘company-wide introduction’.
In the government sector, pilot projects must be constantly linked to large-scale main contracts worth hundreds of billions of won such as NGC2. This is the basis for stable cash flow.
Currently, the explosive growth momentum centered on the U.S. should be successfully replicated around the world, including in Europe and Asia.

2) Profitability management: ‘economy of scale’ and ‘cost control’ must be realized
Adjusted FCF margins should remain at phenomenal levels of 40-50%, even as sales explode 8 to 12 times over the next five years.
To this end, efficient control of sales and marketing costs is an essential prerequisite.
The annual stock dilution rate due to stock compensation costs (SBC) must be controlled at around 1-2% to prevent damage to shareholder value.
The most effective defense for this is to expand the current marginal share buyback to a meaningful scale.

3) Market Confidence: Maintaining Premium Valuations Is Essential
Markets must recognize Palantir as an “irreplaceable operating system (OS) responsible for the transition of national security and industrial AI, not just a SaaS company.
This “non-fungibility” is the key logic to justify high-level multiplexes.

In addition, a macroeconomic environment favorable to growth stocks, such as interest rate cuts, should be created to support the maintenance of high valuations. This is an essential external variable that Palantir cannot control but is necessary to achieve its goals.

If you believe in these assumptions, it’s wise to buy and wait for stock price adjustments if you think it’s impossible for that to happen.