Palantir Technologies Inc. (NASDAQ:PLTR)

The Return on Equity (ROE) for the analyzed period demonstrates a significant improvement, evolving from substantial negative values to positive figures. This shift is directly correlated with changes in net income attributable to common stockholders and total stockholders’ equity.

Net Income Trend

Net income attributable to common stockholders experienced considerable losses in 2020 and 2021, amounting to approximately negative $1.2 billion and negative $520 million, respectively. Losses diminished in 2022 to negative $374 million before transitioning to a profit of roughly $210 million in 2023. This positive trend continued into 2024, with net income increasing to approximately $462 million.

Stockholders’ Equity Trend

Total stockholders’ equity consistently increased throughout the period. Starting at $1.52 billion in 2020, it rose to $2.29 billion in 2021 and $2.57 billion in 2022. Further growth was observed in 2023, reaching $3.48 billion, and continued into 2024, culminating in $5.00 billion. This consistent expansion of the equity base provides a larger foundation for generating returns.

ROE Analysis

Consequently, ROE moved from -76.61% in 2020 to -22.71% in 2021, reflecting the ongoing net losses. The rate of decline slowed in 2022, with ROE at -14.57%. The positive shift in net income in 2023 resulted in a ROE of 6.04%. This upward momentum continued in 2024, with ROE reaching 9.24%, indicating a substantial improvement in profitability relative to equity.

The progression from negative to positive ROE values suggests a successful transition in the company’s financial performance. The increasing stockholders’ equity, coupled with the move to profitability, has significantly enhanced the return generated for shareholders.