FELIX PREHN DAILY MARKET NEWS By Goat Academy
Felix Prehn of the Goat Academy's Daily Stock Market News will make you the best informed investor and trader. Stay miles ahead of the goings on, on Wall Street.
Felix Prehn is a former banker. Felix is also the founder of the Goat Academy, an educational community with a mission to make 1 million people financially free.
FELIX PREHN DAILY MARKET NEWS By Goat Academy
Felix Prehn - Palantir & HIMS: The Unseen Game-Changer! + Stock Market News 06 May 2025 (Goat Academy)
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Felix here. So in the next few minutes I'm going to give you my deep dive thesis on these two high growth companies after their earnings. So, to start with Palantir, we're going to move on to HIMSS. If you don't like deep dives, if you just want the shallow sort of news you get on CNBC, leave. But in all honesty, I've spent the last 24 hours here analyzing the financial statements, listening to the earnings calls and applying the same analytical framework that I used during my banking career. And look if you're really short on time. Here's the essence and write this down.
Speaker 1:Both companies demonstrated exceptional operational execution this quarter, but the market is struggling to reconcile their growth narrative with appropriate valuation metrics. Why? Because traditional valuation metrics simply fail to capture the insane compounding value of these addressable market expansions, margin expansions. Analysts are simple people. Let's face it. This is not a simple business, neither Palantir nor HIMSS. Now, knowing that in principle is genuinely useful and puts you ahead of many, but honestly, it's only about 25% of the equation here. If you want to understand the specific growth drivers, the patterns and the forward-looking guidance, that's where you find the real asymmetric opportunities, which is always my goal here, and I'll also tell you whether I'm buying these stocks after the little mini dip that I'm experiencing, at least when I'm recording this. And all of that is based on the one thing that can dramatically alter your investment returns. It's about getting the entry right, buying the right stock at the right time and selling it at a profit at the right time, and I'll show you an example in a second For Palantir. Actually, I'll show it to you right now.
Speaker 1:I got a message like this on X today from Mark. Hello, Mark. He said glad I listened to you on Palantir. Took some nice profits, around 120. Now waiting to see a good entry point. Thank you. Now. 120 was up here, right. He applied the same strategy to up here and our entry point, the last one, was above 99. So if you got in that 99 or 100 and you sold that 20, well, you would have made 20% in like six or seven trading days. Even if you sold at the current 113, you'd still be up like 13% in seven trading days, which is extraordinary right.
Speaker 1:But you can, of course, also go and listen to the crowd who says buy and hold forever because me and Palantir got married last year. To the crowd who says buy and hold forever because me and Palantir got married last year. We don't believe in stock monogamy. We really don't. Why do we invest? Because we want to make the most amount of return with the lowest amount of risk, so we can retire early, we can enjoy our life, we can look after our real family, not the stock family, and that's ultimately what it's all about. That's what's allowed me to retire in my early 40s.
Speaker 1:And if you want to learn those rules, I'm not going to run you through them in every single video. It would be tedious, it would take too long. Go and watch and learn the rules. Well, it's free. It takes 15 minutes. Felixfrenzorg slash, get free. That's where you get the rules. If you don't know the rules, you slash, get free. That's where you get the rules. If you don't know the rules, you're going to lose. Simple as that. They're harsh, maybe today, but you're feeling a little harsh today. Markets are beautiful, actually, at least from my perspective.
Speaker 1:Now let's dig into Palantir's numbers and, frankly, their numbers blew past most analysts' expectations. Their headline numbers are impressive when you actually break them down. In the US market, palantir delivered absolutely stonking growth 55% year over year, and an even more impressive 71% surge in US commercial revenue. So why does that matter? Well, the commercial side has always been the question mark for Palantir's growth story. Can they translate their government expertise into the private sector? These numbers suggest they're doing precisely that. They've also expanded their customer count by 39% year over year, which demonstrates they're not just growing by extracting more revenue from existing clients. And get this. They're close to 139 deals bigger than a million dollars each. That's the kind of velocity we're hoping for, really, isn't it?
Speaker 1:Now, what about cash? Well, they're sitting on $5.4 billion in cash. It gives them a tremendous optionality to invest if they choose to, whether or whatever gets thrown at them, and, quite frankly, buy back a lot of their own shares and offset all that pesky share-based compensation madness that they've got going on there. They raised four-year revenue guidance, a 36% year-over-year growth, and raising guidance is usually what we want, and if history is anything to judge, by then they're going to beat those numbers as well.
Speaker 1:What about the elephant in the room? Well, the valuation. Yes, I know, bloody hell, it's an expensive stock, isn't it? It trades at a PE ratio of over 600. 100 times sales. By the way, your average software company trades at a PE of about 30 to 40. So what are these guys cooking? Is everybody mad?
Speaker 1:Well, there's not just one, but there are actually three pillars supporting Palantir's premium. First, they are the AI leader through AIP. This isn't just another enterprise-grade sort of solution. No, this is literally like a battle-tested, life-or-death scenario type piece of software. And then, second, they provide mission-critical software, the kind of stuff that big customers just cannot actually function without, and they're so deeply embedded within the government and big commercial operations that it's pretty much impossible to replace. And three, they're smashing the rule of 40.
Speaker 1:Now what on earth is that? The rule of 40 is a principle that says a software company's combined growth rate and profit margin should exceed 40%. It's a quick way to assess the balance between growth and profitability. Palantir's score it's a whopping 83. 83. And that's exceptional, because 40 is what you're gunning for. 83, it's just like you're showing off.
Speaker 1:But then, of course, you've got the old school that looks at PE ratios and all that backward-looking nonsense. And well, it doesn't. But then, of course, you've got the old school that looks at PE ratios and all that backward looking nonsense. And well, it doesn't really work, does it? For disruptive companies? It means you will always be out of them. You will never be in a disruptive company. Think about Amazon in 2010. It looked absurdly expensive on those PE ratios, but they missed the explosion of AWS and the complete dominance in e-commerce the explosion of AWS and the complete dominance in e-commerce.
Speaker 1:So the key is understanding when high multiples are justified by potential growth versus when they're just speculative froth. And maybe you'll ask but when will the valuation normalize? When will it get cheaper so I can buy it? Well, that's actually the wrong question. The right question is will Palantir's execution support this premium valuation over time? The truth is, palantir's execution support this premium valuation over time. The truth is, palantir's heavy investment in R&D and AI capabilities depresses near-term earnings a little bit, but it sets the stage for potentially explosive future growth. They're playing the long game. They're sacrificing immediate profits for market dominance. They're basically giving the software for free to anybody who wants it.
Speaker 1:The real question is whether Palantir will be able to meet expectations. So what are the growth drivers? What's actually under the hood? Well, as I just mentioned, us Commercial absolutely stellar growth hit a billion-dollar annual run rate and they're penetrating healthcare, energy, finance and so on. They're just kind of going into everything and each sector expands the total addressable market. Us government contracts increased 45% year over year. And I know government contracts sound boring, but they're brilliant because they just stick around for life usually. And they're brilliant because they just stick around for life usually. And they're not small projects, by the way. They're big, beautiful contracts with the US Army, intelligence services and so on.
Speaker 1:And Alex Karp, the CEO with the coolest hair on Wall Street well, he noted that there has been a significant reduction in resistance to Palantir, in his colorful language. They're no longer seen as a freak show, which you know is progress. And, more importantly, he mentioned that they're now seeing the full stack engaged across customer organizations. What does that mean in plain English? Well, previously, palantir might only work with technical teams or specific departments, and now they're engaging with the entire organization, from top to bottom. That's how you achieve those masses of deal sizes we discussed earlier. So the scalability and the deal velocity have been extraordinary. And look, as large language models like ChatGPT and so on become commoditized, they're all going to be the same. Basically, palantir's investment in what they call ontology becomes the real mode. Ontology is essentially the process of structuring and contextualizing data so that AI can actually deliver value. So think about it Everyone will have access to powerful AI models, but not everybody can make those models useful for business problems, and that's Palantir's Edge. It's a sustainable differentiator that could protect them from this commoditization risk that we're seeing across AI.
Speaker 1:So is anything bad in these earnings? Well, yeah, international revenue declined 5%, carp, noting that Europe doesn't quite get AI yet, and that's a polite way of saying that Europe is sort of an open-air museum for innovation. They prefer to let in any old Tom, dick and Harry who arrives without a passport and just sort of let their cities sink into filth, stink and crime. Now, there are going to be some angry Europeans disagreeing with me on that one, but if you think about it, it's true. Places like in France that 20, 30 years ago were absolutely beautiful and charming. Well, you're not walking around there after hours now, are you? But that's a little bit off point.
Speaker 1:Palantir's stock dropped after earnings, not because of the stench in Europe. What's it all about? Well, I think it's a lot of short-term trading and people buy stocks to shock horror, make money. And you asked me on this the day before earnings. I gave you my opinion and I said obviously that's just my opinion, but my opinion is always based on what the chart tells me, and when the chart tells me that this yellow line there, by the way, is the 50-day moving average line, when the chart tells me that we are significantly above that, we are stretched, overstretched, perhaps even Now. The last time we were that overstretched was here.
Speaker 1:Precisely the same setup, quite frankly. And when you are that far away from a 15-day moving average line, I think twice about buying something. In fact, I tighten my stops and I want to take profits, just like we wanted to take profits up here. We've got literally the same pattern again here. So you could have again drawn a sort of a trend line up there, which I've just drawn expertly, and it would have given you the same result.
Speaker 1:Now, that doesn't mean that the stock isn't going to bounce back a little bit down and then come back up. So what am I doing? I actually want to buy more pound here. So what do I want to do? Well, I wanted to get closer to this yellow 50-day moving average line that I'm drawing in green here just to confuse you a little. Are you still awake? So that's really it. That's really it.
Speaker 1:We just need to look for the right entry points and the right exit points and right now we're at an exit point and if it rebounds and it goes up, there'll be all these people in the comments going you were wrong, felix. Well, yes, with hindsight I'm often wrong, but you see, rules mean that we are right enough, often enough to make a boatload of money. We are not relying on luck with our entry and exit points. We rely on the same tried and tested rules that the most successful investors in the world have been using for the last 50 years. You want to learn those rules? Come and join the pack. It's free, felixfrenzerorg slash, get free.
Speaker 1:So, in short, I'm bullish on Palantir. I think there is a reasonable path to a trillion dollar valuation. Not in a straight line up and not in the short term, but if AI does what AI is doing and if the robots do what I think it's going to do, and if the US government is going down the road that I think, and if militaries are going down the AI road, as I think, and everything is going to be all home autonomous, you're going to need a operating system for that and you're not going to select Microsoft Windows, because that struggles with all sorts of things and breaks down and you can't really afford for things to break down when they're armed or driving at 100 miles an hour. So you're going to want a system that actually works, and the only system I've seen so far that actually works is this one Palantir.
Speaker 1:Right Now, let's shift gears a bit and look at another high-growth company that's reported absolutely stellar results Hims and Hers. Fanny of Hims identified as Hers, hers and Hers as Hims, wouldn't it? That'd be confusing. Now, many of you we could just call them Them's or Theirs or they or something of that. I had got an email the other day from somebody slightly off-topic works for a very large organisation, a shart name, and she signed off as she slash they, and I just thought that was the most confusing thing in the world to have in your footer.
Speaker 1:Anyway, maybe you're thinking hims and hers it's just some sort of telehealth company, but the numbers, oh my God, the numbers, extraordinary stuff. Revenue up 111%. Just pause and think about that for a moment. They've more than doubled their revenue in a single year. They must be doing something right. There must be some sort of demand for this. Whatever it is that they do.
Speaker 1:Well, their subscriber base grew 38% to nearly 2.4 million people. It's pretty significant because they're not just extracting more revenue from the existing customers, they're actually expanding that customer base significantly. And the real metric that caught my eye is this Monthly online revenue per subscriber. Sexy, it climbed to a 50% year over year. 84 bucks they make out of a subscriber and that kind of gets into the recurring revenue thing a la Netflix. But I guess you don't pay $84 for Netflix At least I hope you don't so they're able to upsell people, it seems. It seems when you have one ailment and you buy drugs for it which are likely to kill you, you feel the need to buy more drugs which are likely to kill you even faster.
Speaker 1:So the combination of these three growth vectors more subscribers, higher revenue per subscriber and overall revenue expansion creates a powerful compounder, which is what we look for in the most promising growth companies. And guess what? They actually become more profitable the more people they have. Their fixed costs are spread across a larger revenue base, which means their margins improve. So they're also building a moat, a literal, physical moat, big hole, lots of crocodiles in it in the form of fulfillment centers.
Speaker 1:Yeah, so they are investing in two capabilities. First, personalization at scale, expanding capacity to handle thousands of potential personalized SKUs, which are, you know, units rather than generic offerings, and that allows them to tailor treatments to individual needs. So if you want a little bit of a you know fat loss medication with a bit of pain stuff and a bit of better sleep and a bit of happiness thrown at the same time, they'll mix that weird cocktail together for you and you will ultimately die of, probably, kidney disease. But don't worry, they'll have a drug for that. And then, second, they're adding specialized infrastructure, sterile fulfillment for injectables and integrated lab diagnostics, no risks of kittens, and those sterile fulfillments.
Speaker 1:And then this unlocks what? Higher margin treatments like the GLP-1s for weight management, hormone therapies, all that kind of stuff. That's usually in-person care Just to piss off the pharmacrat a bit more. Most hormone therapy isn't needed if you have a good diet. There's a great book by a USMD called Dr Fuhrman, f-u-h-r-m-a-n, who has a really nice little setup on the whole hormone thing. So if you're thinking about the whole hormone thing, please read that book first. I'm not selling it to you, I'm just saying it'll prevent your kidneys from going into meltdown.
Speaker 1:But this vertical integration to go back to thems and theys gives them control over more of the value chain. It improves margins, it creates infrastructure. Well, just competitors are going to find expensive to replicate, and that's kind of the whole point. And while weight loss medications like the fat loss drugs, have a lot of buzz and make you lose all your weight in about three hours, they have success in other categories and people don't often realize that. So, yes, there's been a lot of marketing towards weight loss.
Speaker 1:The non-weight loss businesses grew still 30% year over year, and that tells you something. So take dermatology, which grew approximately 50% year over year. Mental health, sexual health, also showed robust growth. I guess it's a little bit less embarrassing, isn't it? Doctor, I've got a rash and consumers are clearly not just adopting hims and hers for their weight issues, but they're embracing it for all sorts of healthcare concerns they think big pharma will treat them with. I guess the analogy there is Amazon, right? Amazon didn't stop at books, netflix didn't stop at DVD rentals, and hims and hers are demonstrating they're not stopping at, you know, making America slim again.
Speaker 1:And the diversification, or seriousness, here is important because that gives them strength, it gives them growth, no matter what happens. So what are the pillars that are powering their growth? Deepening personalization? That's sort of the core differentiator. I think really it's like they've already got 1.4 million subscribers on personalized solutions, which is going to give them just retention, because you won't be able to get that somewhere else so easily. Second, high growth specialities They've already proven that they're able to rapidly scale new offerings and now they have a pipeline with low testosterone menopause support launching this year, and that targets a massive market 50 million people just in the US alone.
Speaker 1:And then you've got longevity, you've got sleep, you've got preventative care. There's just loads of stuff. As the audience gets older, so Americans will get older and older. When they well, when they're thinner, they'll live longer, which actually is a funny one. So hims and hers will make money out of making them thin, and then the thinness will reduce stuff that kills people quickly, like heart disease, and therefore they'll live longer and therefore they'll have more ailments that they're going to want to get treatment for. It's kind of a brilliant strategy, really.
Speaker 1:And third, well, the platform, really. So they're utilizing pretty good technology, like their proprietary MedMatch system and AI tools and so on. They get data from millions of users, which improves experience and makes them more efficient, and actually management drew comparisons to Netflix and how they're leveraging data to deliver better outcomes, and that's pretty crucial as there's definitely competition nipping at their heels. And then fourth, ecosystem. So they're forging these strategic partnerships with the drug makers and that brings treatments, diagnostics, drugs like the Nervino-Disc deal, which they've described as a blueprint for future collaborations, and that's not just about the fatty drugs, it's also about all the other stuff that Novo Nordisk has got going on in the pipeline, so they could be a priority prime partner there. So, in short, they're building a really good business. Yeah, really really clever actually, some sort of virtuous cycle that creates increasing returns on scale. And they gave us very good guidance 2.3 to 2.4 billion in revenue, which is rather ambitious by and they gave us very good guidance 2.3 to 2.4 billion in revenue, which is rather ambitious by 2030, they gave us a 6.5 billion in revenue target and I like management with a longer-term goal and a longer-term vision. That's definitely a good thing.
Speaker 1:Let me just sum up here with the most important things that management said on the call. First, platform power Hims and hers is becoming a key distribution channel. They're attracting partners like Novenorisk by aggregating millions of patients, so it's just a beautiful sales channel for big pharma. And second, they have strong conviction in their cash pay model, deliberately bypassing insurance complexity. So they're aiming for cash price below typical co-pays, and that'll make no sense to you unless you're American and you are on pharmaceutical drugs, but it's what their customers apparently want. And fourth, the long game is apparently sexual health. Yeah, and they're saying we're happy to endure some short-term noise for a stickier, higher lifetime value customer base via daily multi-action personalized treatments.
Speaker 1:And really their goal is to get you, my dear American viewer, hooked on a cocktail of pharmaceutical drugs that will keep you alive for just a little bit longer, but just about, and it'll keep you hooked on that. So if you went off it you'd drop dead tomorrow, and that is probably the ultimate moat. It's a bit like, well, tobacco maybe makes you pretty, pretty addicted. Not exactly the most lovely sort of charming, ethical business model perhaps, but undoubtedly a very profitable one. And there is a biggie coming up big round, rotund one oral weight loss medications, and that fits nicely in with the sexual disease issue. I'm just kidding. They only cost $69 a month and it basically delivers approximately two-thirds the efficacy of Wegovy, but at a fraction of the cost. And it means you don't need to, you know, inject yourself or whatever. So that could be a really nice high-volume offering for them, which could be a good one, even if the branded oral medications come out at scale. And apparently they're also looking at proactive health optimization, what they call preventative and longevity medicine. So they're basically saying, although worried, well, undoubtedly one of those we will start popping whatever it is that we pop, and we'll be able to get it from them and they'll concoct it for us to some sort of personalized thing, and I guess that's probably a real thing, right? Personalized vitamins and supplementation is already a thing Mix in your whatever other drugs you might want to take, and that could be some real value in that. So they're doing a good job, very good job.
Speaker 1:I'm impressed by the execution Stock price. Well, the market wasn't super thrilled on it, but then expectations have been high, and so I said for all of these, we did have a 60, 70% rally in about two weeks before earnings, which is a pretty tough environment to be around. What I'd watch out for is the 50-day moving average line here and again, that's explained in the masterclass that one here that needs to start peaking up again before this really becomes bullish. So good setup, yeah, I'd say so. We just need to pick up a little bit, exceed the previous high, which is around $43, maybe even just a little higher. Maybe even this one up here which sits at $44, that one there, and then I think we're potentially off for another run here in for the worried, well, and apparently those with sexual health issues. If that's you put a comment down below.
Speaker 1:So yeah, I think, impressive numbers, just a tough expectation to beat. And just, both stocks had this tremendous rally before earnings came out, which makes it very, very hard to surprise markets on the upside. But yeah, two great companies, both have ethical issues around it. I definitely would declare that. But it really is up to you whether you care about that or not. I'm not going to judge you for that, but I probably will, but I'll pretend that I won't. So most people do it, isn't it? And if you've got some value out of this, imagine the value you could get out of actually learning the rules on when to buy and when to sell that the most successful investors in the world have been using for five decades. Well, you can, will you, perhaps, felix Frenzel? Or get free Links down below, first one in the description. I wish you all the best.
