Forget Michael Burry's Short Thesis. Here's the Bull Case for Palantir He's Not Talking About.
The famous investor sees consulting-industry-like risks in Palantir, but several of the company's operating metrics tell a different story.
Overview
Michael Burry has publicly questioned whether data analytics giant Palantir Technologies (NASDAQ: PLTR) deserves to be valued like a high-margin software company. He has pointed to its rising accounts receivable and relatively low deferred revenue -- two factors that make Palantir's financial profile look more like that of a consulting company. He has also highlighted the threat that increasingly capable frontier artificial intelligence (AI) models could weaken Palantir's role with commercial customers.
While these risks are important, Palantir's deferred revenue figure does not capture all of its contracted business. The company had $4.9 billion of remaining performance obligations at the end of June, representing noncancelable contracted revenue that had not yet been recognized.
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Originally published at www.fool.com.