February 21st, 2022 | 13:48 CET
Palantir, Kleos Space, Lufthansa - Security as a megatrend
Table of contents:
Palantir - Quarterly figures disappoint
The US company Palantir offers software and services and helps government agencies and companies analyze large amounts of data. CEO Alex Karp once said at the World Economic Forum in Davos: "The core mission of our company is to make the West, especially America, the strongest power in the world to ensure peace and prosperity." The CIA is among the Company's clients and initial investors, which is probably why the Company is considered shrouded in secrecy.
The fight against crime is a major concern for the Company, but it is also attracting more and more commercial companies to its software. In 2021, the number of commercial customers tripled to 147. Among them are very well-known customers such as IBM. In the fourth quarter, sales rose to USD 433 million, an increase of 34%. However, the loss also climbed to USD 156 million. The Company plans to continue investing and expects a 4% drop in profit margin. It also plans to expand into Europe.
In Corona times, the Company gave away its Foundry software to authorities to better combat the pandemic. That gave it access to some German authorities. But the effort is not without controversy. The share, which took off like a rocket, is slowly approaching back to its opening price at the stock market debut of USD 10.00. At its peak, the price was USD 45.00. Investors were disappointed with the quarterly figures, and the share lost over 15%. The next support is at USD 9.85. The Company has potential, but the black numbers are still in the future.
Kleos Space - Strong partnership
In a very futuristic way, Kleos Space serves the global security market. The Company offers its customers space-based, activity-based intelligence data as a Data-as-a-Service product. It started with the nautical market, where it analyzed the movements of ships using radio frequencies. For governments, shipping companies, insurance companies and coast guards, this makes it easier to detect and avert threats from illegal fishing, smuggling, pirates and border guards. The Company now has eight satellites in orbit, and as a result, borders and other large areas can now be monitored cost-effectively on land.
Eight more satellites are scheduled to be launched into space with SpaceX in the first half of 2022. Advanced Ground Information Systems Inc. (AGIS) has recognized the attractiveness of the offering and has signed a data analysis contract with Kleos. AGIS works for US government agencies and the US military and will integrate Kleos' geolocation data into its own control systems. On February 9, the Company announced the partnership with Satellogic in an effort to be more competitive in future tenders. Satellogic owns 17 satellites and offers its customers high-resolution satellite images. The two products, therefore, complement each other ideally. In the event of anomalies, these can be verified directly through satellite images.
Both parties intend to further increase global coverage in the coming years. Once Kleos has the next 8 satellites in orbit, global coverage will increase by 119 million sq km per day. CEO Andy Bowyer said at the International Investment Forum on February 17, "What is even more exciting is the Earth observation market, which is essentially about gathering information about what is going on." The stock has been running sideways between EUR 0.374 and EUR 0.464 since January 21 and is currently trading at EUR 0.432. As soon as the next satellites are in space, the share should pick up again as more data will be available to customers.
Lufthansa - Cargo traffic is going well
The issue of security in relation to Corona has hit Lufthansa hard. The number of flights collapsed overnight, and the Group could only watch and fight for survival. Now with the prospect of an end to the pandemic, Lufthansa could be on the verge of a turnaround. More and more countries are opening for travel, and Germans are craving a vacation in the sun. On Germany's favorite island, Mallorca, the masks have fallen, so demand for flights will increase again.
The situation is different for business travel. There, Lufthansa was strong before the pandemic. As a result of the pandemic, many companies were forced to switch to online meetings and have now established them. Even if this does not make every business trip unnecessary, it does eliminate some for the future. On the other hand, Lufthansa is benefiting from freight traffic. Due to the disrupted supply chains, companies resort to air travel when in doubt so that production does not have to come to a standstill. The fact that demand is picking up again overall can be seen from the fact that the Group recently announced that it would no longer be laying off pilots.
Pilot training is also to be continued. Analysts have different opinions on the share, currently quoted at EUR 7.534. While Bernstein Research and Goldman Sachs see the share rather neutrally due to the business trips and a presumably poor fourth quarter by Omicron, Bankhaus Metzler is positive for the share and calls out a price target of EUR 10.00. After all, the debts to the state have been settled, and the overall picture is brightening. The share has formed an upward trend, only to be broken with closing prices below EUR 6.99.
The topic of security is becoming more and more important in all industries. Palantir works with the intelligence services and wants to fight crime. However, the Company is still in the red. Kleos Space has a very interesting and scalable business model. As soon as larger orders are landed, the share price will jump. Lufthansa sees the light at the end of the tunnel. When the pandemic ends, good summer business beckons.
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