Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

Palantir Technologies  / Equity Capital Markets

<p>Palantir is ready to complete its Direct Public Listing on September 23rd. </p>
<p>Our valuation analysis suggests an implied market cap of $29.7 billion and a target price of $13.7 per share for Palantir (49% higher than the base price of $9.2 per share). The IPO price range is from $11.1 (low) to $16.6 per share (high). Assuming Direct Public Listing (DPL) market cap of $20 billion and diluted shares of 2.17 billion, this suggests $9.2 per share. Given the solid upside, we have a positive view of this DPL.</p>
<p>There are three key positives with Palantir which we believe are likely to outweigh its negatives, leading many investors to value this company at nearly $30 billion.</p>
<ul>
<li>First, we believe the <strong>company's accelerating sales growth</strong> since the launch of its Foundry product in 2017 is likely to be valued highly. The company's sales growth is clearly much higher than its peers in 2020. </li>
<li>
<div class="content-highlight">Second, Palantir has picked a <strong>great time</strong> to complete its public offering with great investors demand high-quality software-related stocks this year.</div>
</li>
</ul>
<ul>
<li>Third, Palantir has been enjoying a noticeable improvement in its operating margins and the company possesses a strong balance sheet. </li>
</ul>

Palantir is ready to complete its Direct Public Listing on September 23rd. 
Our valuation analysis suggests an implied market cap of $29.7 billion and a target price of $13.7 per share for Palantir (49% higher than the base price of $9.2 per share). The IPO price range is from $11.1 (low) to $16.6 per share (high). Assuming Direct Public Listing (DPL) market cap of $20 billion and diluted shares of 2.17 billion, this suggests $9.2 per share. Given the solid upside, we have a positive view of this DPL.
There are three key positives with Palantir which we believe are likely to outweigh its negatives, leading many investors to value this company at nearly $30 billion.

First, we believe the company's accelerating sales growth since the launch of its Foundry product in 2017 is likely to be valued highly. The company's sales growth is clearly much higher than its peers in 2020. 

Second, Palantir has picked a great time to complete its public offering with great investors demand high-quality software-related stocks this year.



Third, Palantir has been enjoying a noticeable improvement in its operating margins and the company possesses a strong balance sheet. 


Equity Analyst, LightStream Research

Supun Walpola

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<p><a href="https://www.smartkarma.com/entities/medallia-inc" target="_blank" data-smartkarma-citation="entities:28160:1" rel="noopener">Medallia Inc (MDLA US)</a>  is a US-based enterprise SaaS provider that is set to go public on Friday (19th July 2019). Medallia has set an IPO price range of $16.00-$18.00 per share and at the mid-point of the IPO range, Medallia is valued at a market cap of $2.1bn and an EV of $1.8bn. Medallia plans to raise around $240m (at the mid-point of the IPO price range) floating 11% of the ownership. </p><p>Medallia is yet another attractive opportunity for investors to get exposure into the enterprise SaaS market, that too in the rapidly growing experience management segment. Medallia’s innovative AI-driven platform and better monetisation potential allows the company to stay above competition, and to attract a sizable portion of market growth. This coupled with Medallia’s clear path to profitability in the next 3-5 years, a debt-free balance sheet, and an attractive valuation should make investors feel confident about the company.</p><div class="content-highlight"><p><strong>Our target FY1 EV/Revenue multiple of 8.0x for Medallia gives a share price of $28.40 – a 67% upside from the mid-point of the IPO price range.</strong></p></div>

Medallia Inc (MDLA US)  is a US-based enterprise SaaS provider that is set to go public on Friday (19th July 2019). Medallia has set an IPO price range of $16.00-$18.00 per share and at the mid-point of the IPO range, Medallia is valued at a market cap of $2.1bn and an EV of $1.8bn. Medallia plans to raise around $240m (at the mid-point of the IPO price range) floating 11% of the ownership. Medallia is yet another attractive opportunity for investors to get exposure into the enterprise SaaS market, that too in the rapidly growing experience management segment. Medallia’s innovative AI-driven platform and better monetisation potential allows the company to stay above competition, and to attract a sizable portion of market growth. This coupled with Medallia’s clear path to profitability in the next 3-5 years, a debt-free balance sheet, and an attractive valuation should make investors feel confident about the company.Our target FY1 EV/Revenue multiple of 8.0x for Medallia gives a share price of $28.40 – a 67% upside from the mid-point of the IPO price range.

Medallia IPO: An Attractive SaaS Opportunity

United States

Verint Systems Inc. provides analytic solutions for communications, interception, digital video security and surveillance, and enterprise business intelligence.  The Company's software generates actionable intelligence through the collection, retention, and analysis of voice, fax, video, email, Internet, and data transmission from various types of communications networks.

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Verint Systems (VRNT US)

Palantir DPL Valuation Analysis

Our valuation analysis suggests an implied market cap of $29.7 billion and a target price of $13.7 per share for Palantir (49% higher than the base...

Douglas Kim

Medallia IPO: An Attractive SaaS Opportunity

Medallia Inc (MDLA US) is a US-based enterprise SaaS provider that is set to go public on Friday (19th July 2019). Medallia has set an IPO price...

Supun Walpola

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