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With 23% Growth Palantir Stock Could Fall Below $10
Alex Karp, CEO of Palantir arrives ahead of a “Tech For Good” meetup at Hotel Marigny in Paris on … May 15, 2019, held to discuss good conduct for technology giants. – French President and New Zealand’s premier will host other world leaders and leading tech chiefs to launch an ambitious new initiative known as the “Christchurch call” aimed at curbing extremism online. The political meeting will run in parallel to an initiative launched by the French President called “Tech for Good” which will bring together 80 tech chiefs in Paris to find a way for new technologies to work for the common good.
AFP via Getty Images
Palantir, the Denver-based data analytics software provider, has been a pretty mediocre investment since its October 2020 direct listing.
Based on its second quarter earnings report which prompted a 15.6% plunge in its stock before the market opened on August 8 I would not recommend buying its shares.
Palantirs two red flags its cash consumption and investor-unfriendly governance structure, about which I wrote in , are still signaling a warning to the investing public.
Since then, it has cured its cash immolation problem, but investors still must cope with its awkward governance structure. Now there is a new challenge: slowing growth resulting from delayed government contracts and corporate clients spooked by a rising recession risk.
Palantir Trying To Grow Commercial Base
Palantir sells data analytics software primarily to U.S. government agencies. In addition, Palantir’s software is also used for intelligence gathering, counterterrorism and military purposes.
The Denver-based company has been aiming to grow its commercial customer base by expanding into the health care, energy and manufacturing sectors.
Aiming to boost commercial revenue growth, Palantir has been investing in special purpose acquisition companies. SPACs raise money in an initial public offering with the purpose of making acquisitions.
If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns for issues such as PLTR stock is one key to the investment guidelines.
Follow Reinhardt Krause on Twitter @reinhardtk_techfor updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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Open An Account & Invest
Now that you know everything you need to know about Palantir stock, you can analyse the information and make a decision on whether or not you wish to invest in the industry.
Should you choose to do so, you may want to pick a suitable brokerage that will cater to your investing needs. In the sections below, we will show you how to begin trading with the chosen broker of your choice.
Disappointing Second Quarter Report
Palantir like all publicly-traded companies is subject to what I call the beat and raise rule. That means if a company exceeds Wall Streets expectations for growth and profitability and boosts its forecast, the stock goes up. If it fails to do that, its shares drop.
Palantir did the latter and its shares fell 15.6% in premarket trading. As CNBC reported, this followed its announcement of an unexpected quarterly loss, and its full-year forecast due to the uncertain timing of some government contracts.
The good news was that Palantirs revenue grew 26% to $473 million in the quarter $700,000 more than Refinitiv expected.
That bad news was that the company reported a loss of a penny a share while analysts expected a profit of three cents. CFO David Glazer told CNBC that Palantirs miss was due to a decline in investments including SPACs and marketable securities.
Whats more, Palantir lowered its guidance for the quarter and the year. Palantir projected sales to grow 21% in the current quarter in the range of $474 million to $475 million. Not only is that the slowest growth the company has experienced since going public, it is around $24 million below analysts projections, according to FactSet.
Whats more, Palantir lowered its 2022 growth forecast from 30% to about 23% in a range between $1.9 billion and $1.902 billion roughly $60 million below what analysts had expected, according to Reuters.
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How To Buy Pltr Stock Summary
Are you looking to invest in big data analytics? This guide will show you how to buy stocks, including PLTR.
Before buying a stock, you must first pick a brokerage, a financial company that has a license to buy and sell shares on your behalf. In the past, this was done through the phone but nowadays it is easy, safe and secure to do so over web platforms or phone apps. Also, you might consider opening a $0 commissions cost account. If youre starting with a modest portfolio, this approach can make a difference in the long run.If you are a first-time investor, you need an account at a brokerage with access to the New York Stock Exchange .
After deciding how many shares of stock you want to buy, you are ready to place an order through your broker’s platform. You should first get familiar with different order types and, preferably, try them out on your broker’s demo platform. Bid: The highest price that a buyer is willing to pay for 1 share of any stock. Ask: The lowest price that a seller is willing to sell 1 share of any stock for. Spread: The difference between the bid and the ask. For example, if the bid for PLTR is $29.60 while the ask is $29.94, then the spread is $0.34. Instructs your broker to buy the designated amount of shares at the next available price. Limit order: A type of order that targets a specific price. The broker will buy your shares only at that price or better.
Palantir: Adapt To Grow
One point very much in Palantirs favor is that it knows how to adapt to change. A good example is its harnessing of the coronavirus pandemic. According to a report in the New York Times, when Covid-19 threatened the world, Palantir decided to be part of the search for solutions and teamed up with a dozen countries for the provision of technology to track and contain contagions.
This remarkable speed of response underscores that its software is flexible and can perform multiple tasks, beyond military or homeland security developments. Suffice it to say that the U.S. Army uses it for logistics, Credit Suisse uses its algorithms to combat money laundering, and the German pharmaceutical company Merck uses Palantir software to speed up the development of new cancer drugs. Even Ferrari analyzes the performance of its vehicles in Formula 1 races with artificial intelligence developed by Palantir, explains the New York Times.
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Accelerating Growth In Commercial Revenue
Palantir’s second-quarter revenue rose 49% year over year to $376 million, beating estimates by $14.5 million and matching its growth in the first quarter. It closed 62 deals worth $1 million or more, gained 20 new customers, and its average revenue per customer rose 19% year over year to $7.9 million.
Image source: Getty Images.
Palantir’s government revenue rose 66% to $232 million, while its commercial revenue increased 28% to $144 million. The growth of its government business decelerated slightly from the first quarter, but the growth of its commercial business accelerated significantly.
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Revenue Growth |
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Data source: Palantir. YOY = year over year.
The commercial segment’s acceleration counters the bearish argument that Palantir will struggle to expand its commercial business to reduce its dependence on government contracts. Government contracts, the bears often argue, have less long-term growth potential than commercial contracts.
Palantir mainly attributed its commercial growth to the U.S. market. Its U.S. commercial revenue surged 90% year over year, accelerating from the segment’s 72% growth in the first quarter of 2021.
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The Bottom Line On Pltr Stock
Palantir is a leading player in the data mining, analytics, and security space. It continues to grow operations. The company can potentially become one of the most crucial software companies of the next decade.
Palantir is well-positioned to benefit from the tremendous global big data market opportunity, which could be well more than $200 billion over the next five years. Management predicts annualized revenue growth of at least 30% through 2025. If that trend plays out, PLTR stock looks like an attractive long-term investment despite its current lofty valuation.
On the date of publication, Tezcan Gecgil did not have any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Tezcan Gecgil, Ph.D., has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all three levels of the Chartered Market Technician examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.
Grading Palantir Technologies Inc Stock
Stock evaluation requires access to huge amounts of data and the knowledge and time to sift through it all, making sense of financial ratios, reading income statements and analyzing recent stock movement. To help individual investors with that daunting task, AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels.AAIIs proprietary stock grades come with A+ Investor. These offer intuitive A-F grades for each of five key investing factors: value, growth, momentum, earnings revisions and quality. Here, well take a closer look at Palantir Technologies Incs stock grades for value, growth and quality.
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Palantir Signs $20 Million Deal With Skorea’s Hyundai Heavy Industries
Palantir Technologies Inc announced on Wednesday it signed a deal valued at $20 million over five years to expand its partnership with South Korea’s Hyundai Heavy Industries Group, one of the world’s largest shipbuilding conglomerates. The conglomerate’s shipbuilding affiliates including Hyundai Heavy will use Palantir’s operating system, known as Foundry, to strengthen data-driven decision making, Palantir’s Chief Operating Officer Shyam Sankar told Reuters. Companies in the export-driven economy, faced with supply chain snarls and volatility for raw material prices, are increasingly seeking to make interconnected decisions with their data that help get immediate results in weeks, Sankar said.
Palantir: A Brief History
Palantir has been around since 2003, when the company was founded by the Silicon Valley billionaire Peter Thiel and several others. Peter Thiel is still at the company as chairman, and the current CEO is Alex Karp another founder.
The company has a history steeped in secrecy, with very little known about its operations of the projects that it has carried out for government entities until recent years. It has however, never struggled to secure funding from outside investors, managing to raise over $2.75 billion even before the company went public in September 2020.
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Palantir: The Perfect Stock For Dangerous Times
Big-data software company Palantir may be the company that benefits the most from these huge global problems. Palantir went public in 2020, and now its stock is at all-time lows. Palantir was founded as a way to gather disparate data and find patterns within huge data sets, borne out of the global “War on Terror.”
Palantir Technologies Inc. closed the most recent trading day at $7.86, moving +1.03% from the previous trading session.
Every investor in Palantir Technologies Inc. should be aware of the most powerful shareholder groups. And…
Citi analyst Ryan Levine recently spent some time in California and says the utilities he covers are more prepared for wildfires this year. Data analytics firm Palantir deserves some of the credit.
Wall Street’s most successful money managers have used the bear market decline to pile into cutting-edge stocks.
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Analyst Future Growth Forecasts
Earnings vs Savings Rate: PLTR is forecast to remain unprofitable over the next 3 years.
Earnings vs Market: PLTR is forecast to remain unprofitable over the next 3 years.
High Growth Earnings: PLTR is forecast to remain unprofitable over the next 3 years.
Revenue vs Market: PLTR’s revenue is forecast to grow faster than the US market .
High Growth Revenue: PLTR’s revenue is forecast to grow faster than 20% per year.
Adding Pltr Stock To Portfolios
Among six analysts polled PLTR stock has a hold rating. The shares have a 12-month median price target of $25, implying little change from current levels. Put another way, the stock is in a consolidation phase. The 12-month price range currently stands between $18 and $31.
Therefore, buy-and-hold investors could consider investing in PLTR stock if the price continues to decline, especially toward the $20 level. Such a pullback would improve the margin of safety.
Alternatively, you could consider buying an exchange-traded fund that has Palantir stock as a holding. Examples include the ARK Innovation ETF , the Defiance Next Gen Big Data ETF , Renaissance IPO ETF , or the SoFi Social 50 ETF .
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Etoro Leading Social Trading Platform With Commission
eToro is a social trading platform that has quickly become one of the leading trading platforms and brokers in the world, with more than 26 million traders. It was launched in 2006 and is a very highly regulated broker, regulated by agencies such as the FCA, CFTC, and the CySEC. It also has some of the most competitive fees of any platform in the same league and allows commission-free trading. Their spreads are also quite low when compared to their closest competitors.
eToro also offers a very wide variety of products to choose from. Through eToro, traders can access over 2400 different markets across asset classes including cryptocurrencies, commodities, stocks, indices, and ETFs. eToro enables you to purchase hundreds of stocks, including Palantir, in the traditional way as well as stock CFDs. By trading CFD derivatives you can trade on a speculative basis, as well as use leverage of up to 5:1. Traders who hold a CFD stock position, do not take ownership of the underlying asset or obtain shareholder rights.
eToros interface is designed in a very intuitive manner, making it extremely easy to navigate. They also offer a demo account that users can use in order to get familiar with the platform.
eToro fees:
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Investing In Palantir Stock The Great Promise Of The Decade
Palantir Technologies is one of the most attractive companies when it comes to analyzing the future price of its shares. This qualifier does not mean that investing in Palantir is a great idea, nor is it a lousy decision, but rather points to the challenge of anticipating the value performance of a company that is outside the usual Wall Street standard.
Palantir is not a company that extracts or sells oil , does not manufacture smartphones , is not a physical retailer , nor does it specialize in online commerce .
Palantirs activity is, for mortals, a real unknown. A mix of developments in digital infrastructure and massive analysis of big data and artificial intelligence, combined with an oiled lobbying capacity in the highest governmental spheres, especially in the United States.
Palantir offers itself with the slogan Foundational Software of Tomorrow. Delivered Today, and on the home page of its website it describes its work as a company that creates software that enables organizations to effectively integrate their data, decisions, and operations.
As positive points when making the decision to invest in Palantir stock, it can be said that it enjoys high prestige in the technological and organizational management spheres. In addition, it has a presence in the strategic field of image recognition and facial identification, a business segment that has a huge future.
And a not minor fact: it still does not give profits.
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