Palantir Stock- PLTR Shares: Is It a Buy Right Now? Here’s what earnings show, Palantir stock chart
Recent IPO Palantir Technologies (PLTR) has risen after the software maker achieved its first profitable quarter.
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The Denver-based software provider aims to grow its commercial customer base by expanding into the healthcare, energy and manufacturing sectors. Palantir software is used by government agencies, the main driver of growth, for intelligence gathering, counter-terrorism, and military purposes.
Read on to find out what the fundamentals and technical analysis say about buying PLTR stocks now.
Palantir was founded in the early 2000s by PayPal (PYPL) co-founders Peter Thiel, Nathan Gettings, Joe Lonsdale, Stephen Cohen and Alex Karp. The name of the company is derived from the palantiri, “stones to see” shaped like a crystal ball from The Lord of the Rings.
The Denver-based company offers three platforms: Palantir Gotham, used primarily by government agencies; Palantir Metropolis for banks, financial services companies and hedge funds; and Palantir Foundry, used by corporate clients.
To accelerate corporate adoption of artificial intelligence software, Palantir and IBM (IBM) announced a global partnership earlier this year. Under the agreement, Palantir made its Foundry software available to IBM cloud computing customers. The Foundry platform is a centralized data operating system that enables users to manage, filter, and visualize large data sets.
Fundamental analysis of PLTR stocks
IBD Stock Review assigns Palantir a Composite Rating of 39. This proprietary rating offers investors a quick way to assess a stock’s key growth traits. Palantir’s score places it in the top half of the 93-stock enterprise software group, which includes DocuSign (DOCU), Salesforce.com (CRM), Shopify (STORE) Y Video zoom (ZM).
A rating of 57 earnings per share, part of the overall composite score, also lags behind. However, that could improve, as Palantir is expected to make its first annual profit this year.
On May 11, the company posted its first quarterly profit of 4 cents per adjusted share on revenue of $ 341.2 million. Profits were met, while sales were up 49% year-over-year and exceeded views by $ 332.2 million.
Palantir software is used by government agencies in a wide range of applications, and the company sees plenty of room for further expansion in the commercial sector.
“Where the government’s response to the pandemic has been effective, we are seeing a commercial tailwind,” Chief Operating Officer Shyam Sankar said on the earnings call. “In the United States, in particular, we continue to deliver exceptional results, where revenues grew 83% in the US government and 72% in commercial. And we have a lot of room for maneuver for growth in these markets.”
PLTR Stock Technical Analysis
PLTR shares are more than 50% from their January 27 peak. But it is still up almost 200% since its debut on September 30, when Palantir launched a direct listing at a price of 7.25 per share.
In a traditional IPO, companies create new shares, underwrite them, and sell them to the public. A direct listing does not create new shares and sells only existing shares outstanding with no subscribers involved.
Palantir’s shares quickly formed a four-week IPO base, which it cleared in late November. After a 191% run from the 11:52 buy point, the stock built an eight-week consolidation. A subsequent breakout yielded a 34% gain from the 33.60 entry, before stocks began to pull back.
Palantir’s stock’s relative strength rating of 80 means it is in the top 20% of all stocks. The relative force line, which compares a stock’s performance to the S&P 500, is off its January 27 peak. A move to new high ground on or before a possible breakout would be a bullish sign.
A D- Accumulation / distribution rating points to more recent net sales vs. mutual fund purchases.
As of March 31, 180 mutual funds owned Palantir shares. Those taking new positions and earning an A or A + from IBD include American Beacon ARK Transformational Innovation Fund (ADNPX), Alger Large Cap Growth Portfolio (AAGOX), and Monetta Fund (MONTX).
Palantir’s recent initial public offering continues to post double-digit sales growth and is expected to make its first annual profit this year. The software maker aims to expand its commercial business, as government agencies are the main growth engine. You recently started accepting Bitcoin as payment and you can invest in the cryptocurrency.
Palantir shares are more than 50% below their high and have stalled below their 50-day moving average since mid-February, according to MarketSmith graph analysis. Wait to see if you can pick up and hold above your 50 day line. That could kick-start the right side of a deep base. So PLTR is not a buy at this time.
But with Palantir getting his first profitable quarter and stocks climbing, he’s a promising candidate for the watch list. So keep an eye on the market in general. The uptrend of the market is currently under pressure, making all purchases riskier than usual. Read The Big Picture for a detailed daily market analysis.
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Follow Nancy Gondo on Twitter at @IBD_NGondo
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