Can Peter Thiel pull a rabbit from his hat with Palantir? | PE Hub

What could go wrong for Palantir?

There are downside risks to monitor. Although there are several great things going on for Palantir, we would caution investors on the following potential downside risks for the company:

  • Unclear long-term profitability potential: We are encouraged by recent media reports that Palantir remains on track to become profitable by the end of 2017. However, the long-term cost structure of comparable big data analytics and business intelligence companies remains unproven and debatable. Over the longer-term, as Palantir shifts from a services-and-consulting-driven sales cycle to a traditional SaaS sales cycle, we expect longer sales cycles, which will likely lead to a structurally higher spend compared to today’s levels.
  • Opaque pricing strategy: Unlike some of its peers, Palantir does not publicly disclose its pricing strategy. This lack of transparency leads to an unclear understanding of its offerings and how they compare with the offerings of its peers. Media reports regarding Palantir’s price sheets indicate that Palantir’s solutions may be more expensive than its peers. That could lead to a lack of pricing leverage or to increasing customer acquisition costs.

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Can Peter Thiel pull a rabbit from his hat with Palantir? – PE Hub.