BizNews Ricardo Portfolio update: Palantir, Uber, Lesaka, and Exemplar

Worth. In our intrinsic value, we have them at $150 a share. That's quite a long way below where they are trading at the moment, around $170. So the market has been running ahead of our intrinsic value number. And these results make that harder to wave away, though. 96% growth year on year, accelerating from 80% growth in the previous quarter. So here's how I think about it.

Don't ask what Palantir is worth. Ask what you have to believe. At $150, you need free cash flow to compound at roughly 35% a year for five years and then fade into normal growth. That's the way intrinsic value calculations are made. That's the template. You have fairly rapid for five years and then it tails away to normal five, six, seven percent growth.

Now, when I look at Palantir at today's price, it's got to be higher than 35% for the next five years. It sounds heroic, but stop for a minute and remember: here's a company that three months ago was growing at 80% a year, now it's growing at 96% a year. Even if that pace is cut by half, you are still being conservative at 35%. So I'm inclined to lift our intrinsic value to

About $170 a share for Palantir. That's a rise of roughly an eighth. Not because Karp writes like a poet, which he does, but because the cash is arriving faster than I'd modeled. But there's a flag, and it's the one that nags at me. Revenue is what Palantir delivers from deals signed earlier. The leading indicator is what it signs now. Total contract values grew only about

6% in the past three months. In American Commercial, the area where it's growing so fast year on year, it was only up by about 11%. That against 96% revenue growth is a very big gap. In fairness, though, the backlog tells a kind of story. The remaining value of American commercial contracts is up nearly 80%. So it isn't a cliff.

It's a deceleration that the market's already half-pricing, with the share price slipping a little after the numbers, but it's holding firm there. What would change my mind? Well, there are two things. If contract signings stay in single digits for another quarter or two, while revenue growth then cools down towards 50% from remember the 96% it's at the moment, well, I'd have to cut our projected growth and thus.