Sign InSummary
Palantir Technologies Inc. (PLTR) has shown robust performance with a significant upward change in price, positive perception among analysts and high-profile investors, and a bullish price target, indicating potential growth despite being unprofitable at present, making it a 'Buy' stock with inherent risks. (July 31, 2023)
Fundamental Analysis
Palantir Technologies Inc. (PLTR) has shown a robust performance as of late, indicated by the significant upward change in the price by 11.40% to close at $19.84 as of July 31, 2023. The stock hit its year high at $19.995 on the same day, a substantial surge from its year low at $5.92.
A significant element of the company’s performance is the positive perception among analysts and high-profile investors. Catherine Wood, CEO of ARK Invest, has recently invested in PLTR among other companies. This move signifies recognition of the company's strong growth potential.
Moreover, the firm received a boost following a bullish price target set by Wedbush analysts ahead of its earnings announcement next week. They initiated coverage with a 'Buy' rating and a $25 target price due to Palantir's unmatched AI fortress.
However, it's important to note that the company’s EPS stands at -0.12 and is currently valued at a PE of -165.33 indicating it isn’t profitable at present. Meanwhile, it has a massive shares outstanding of around 2.12 billion.
Mirroring the increased investor interest, Palantir also saw a high trade volume of about 140.05 million, significantly more than its average volume of approximately 81.73 million.
Technical Analysis
Looking at the stock’s recent price trend, the company’s 50-day moving average stands at $15.18, while the 200-day moving average is at $9.66, illustrating a consistent upward trend.
The RSI14 is 70 which is toward the high end, suggesting that recent buying has been quite strong. Meanwhile, a positive MACD (3-month) of 0.87 represents a bullish signal.
For the stock price prediction, given the recent positive sentiments surrounding the stock, the price appears poised for another upswing in the next trading session on August 1, 2023.
Stock Price Prediction
The current DCF is $21.10. This value is slightly above the last closing price, indicating a potential undervaluing of the stock. Given the positive sentiments and technical indicators, the stock could likely open higher and might reach $21 or more in the next trading session.
Next week marks the company's earnings announcement. If the earnings exceed expectations, it may further fuel the stock's upward momentum significantly. The issued bullish price target of $25 by Wedbush analysts serves as a potential price level the stock can reach post-earnings.
Final Evaluation
While Palantir's current unprofitability raises caution, its AI capabilities and increasing market presence shed a positive light on its future capabilities and profitability. The recent price action and positive sentiments surrounding the company also strongly assert this.
Considering a longer-term perspective with a speculative element, the discounted cash flow model and the significant investor interest, there seems to be an agreement among various analysts that the stock is ripe for growth.
Therefore, based on the detailed analysis above, the stock can be categorized as a 'Buy'. This is contingent on investors understanding the inherent risks of investing in a company that is currently unprofitable, despite its strong growth prospects.
