Enterprise Value to FCFF (EV/FCFF)
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Palantir Technologies Inc. pages available for free this week:
- Balance Sheet: Assets
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Analysis of Geographic Areas
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Debt to Equity since 2020
- Price to Sales (P/S) since 2020
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Free Cash Flow to The Firm (FCFF)
Palantir Technologies Inc., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Cash Flow from Operating Activities
- There is a clear upward trend in net cash provided by operating activities over the five-year period. In 2020, the company experienced a significant negative cash flow of approximately -296.6 million US dollars. However, starting in 2021, this shifted to a positive cash inflow of around 333.9 million US dollars, followed by a slight decline in 2022 to roughly 223.7 million US dollars. From 2022 onwards, the company shows strong improvement, reaching 712.2 million US dollars in 2023 and further increasing to 1.154 billion US dollars by 2024. This trend indicates a significant strengthening in operational cash generation capabilities over time.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm follows a pattern closely aligned with operating cash flow, beginning with a negative value of around -297.5 million US dollars in 2020, transitioning to positive values thereafter. The FCFF increased to 323.4 million in 2021, dipped to 183.7 million in 2022, then rose substantially to 697.1 million in 2023 and grew further to 1.141 billion US dollars in 2024. This reflects enhanced cash generation after accounting for capital expenditures, implying the company is generating increasing surplus cash that can be used for expansion, debt repayment, or returns to shareholders.
- Overall Insights
- The data suggests a significant turnaround from negative to positive cash flow performance within a year, with consistent growth from 2021 to 2024. Both key cash flow measures—operating cash flow and free cash flow—demonstrate robust improvement, indicating enhanced operational efficiency and effective capital spending. The substantial increase in free cash flow in the last two years highlights strong liquidity and potentially better financial flexibility moving forward.
Interest Paid, Net of Tax
Palantir Technologies Inc., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2 2024 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= × =
- Effective income tax rate (EITR)
- The effective income tax rate demonstrated significant fluctuations over the observed periods. Starting at a very low rate of 1.07% in 2020, there was a marked increase to 21% for both 2021 and 2022, indicating a considerable rise in tax burden during those years. Subsequently, the rate declined notably to 8.32% in 2023 and further reduced to 4.35% by the end of 2024. This pattern suggests that the company experienced heightened tax obligations in the early years followed by a substantial decrease in later years, potentially due to changes in tax strategy, fiscal adjustments, or alterations in the composition of taxable income.
- Cash paid for interest, net of tax
- The cash outflow for interest payments, net of tax, showed a sharp downward trend over the years reported. Initially, in 2020, the company paid a significant amount of $11,310 thousand, which sharply decreased to $2,191 thousand in 2021. This decline continued dramatically, reaching $4 thousand in 2022. No data is available for 2023 and 2024, which prevents a conclusive statement for those years. Nonetheless, the existing data indicates a substantial reduction in interest expenses, possibly reflecting refinancing, debt repayments, or changes in debt levels during the period analyzed.
Enterprise Value to FCFF Ratio, Current
Palantir Technologies Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Accenture PLC | |
| Adobe Inc. | |
| Cadence Design Systems Inc. | |
| CrowdStrike Holdings Inc. | |
| Fair Isaac Corp. | |
| International Business Machines Corp. | |
| Intuit Inc. | |
| Microsoft Corp. | |
| Oracle Corp. | |
| Palo Alto Networks Inc. | |
| Salesforce Inc. | |
| ServiceNow Inc. | |
| Synopsys Inc. | |
| Workday Inc. | |
| EV/FCFF, Sector | |
| Software & Services | |
| EV/FCFF, Industry | |
| Information Technology | |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Palantir Technologies Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Software & Services | ||||||
| EV/FCFF, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a significant decline from 41,738,848 thousand US dollars in 2020 to 15,242,186 thousand US dollars in 2022, indicating a downward trend over these initial three years. However, from 2022 onwards, there was a marked resurgence, with EV increasing sharply to 48,189,177 thousand US dollars in 2023 and then experiencing a substantial escalation to 287,139,473 thousand US dollars in 2024. This pattern reflects a pronounced volatility followed by a strong recovery and considerable growth in the latest reported year.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm showed an initial negative value of -297,534 thousand US dollars in 2020, which then shifted to positive territory in 2021 at 323,415 thousand US dollars. Subsequent years maintained positive cash flow, though with fluctuating amounts: 183,714 thousand in 2022, which decreased relative to 2021, then increased to 697,069 thousand in 2023, and further rose to 1,141,231 thousand in 2024. Overall, there is a trend of improving and positive free cash flow over the period, peaking in 2024.
- EV/FCFF Ratio
- The EV to FCFF ratio was not available for 2020 but showed a high valuation multiple of 66.45 in 2021, increasing to 82.97 in 2022, indicating that enterprise value was rising faster than free cash flow, or that free cash flow was compressed relative to the valuation during this time. In 2023, the ratio decreased to 69.13, suggesting a relative improvement or alignment between EV and FCFF. However, in 2024, there was a dramatic spike to 251.61, driven mainly by the exponential rise in enterprise value compared to FCFF growth. This unusually high multiple suggests the company was valued at a significantly higher premium relative to its free cash flow in the latest period.