Palantir Technologies Inc. (NASDAQ:PLTR)

The Return on Assets (ROA) exhibited a significant improvement over the observed period. Initially negative, the metric transitioned to positive values, demonstrating increasing profitability relative to the company’s asset base.

Net Income Trend

Net income attributable to common stockholders demonstrated a clear progression from substantial losses in 2020 and 2021 to profitability in 2022, with further gains in 2023 and 2024. The magnitude of the loss decreased year-over-year before becoming a positive value, contributing to the ROA improvement.

Total Assets Trend

Total assets increased consistently throughout the period. While asset growth was moderate between 2020 and 2022, it accelerated significantly in 2023 and 2024. This growth in the asset base occurred alongside improvements in net income, which was crucial for the positive shift in ROA.

ROA Analysis

In 2020, the ROA was -43.35%, reflecting a substantial net loss relative to total assets. The ROA improved to -16.02% in 2021 and -10.80% in 2022, indicating a reduction in losses. A turning point was reached in 2023, with the ROA becoming positive at 4.64%. This positive trend continued into 2024, with the ROA reaching 7.29%, signifying a substantial increase in the efficiency with which assets are being used to generate profits.

The combined effect of increasing net income and growing total assets resulted in a marked improvement in ROA. The company’s ability to translate asset investments into profits has demonstrably increased over the period, as evidenced by the shift from negative to positive and subsequently increasing ROA values.