Sign InPalantir Technologies Inc. (PLTR) Shows Volatility amid Fundamental Analysis
Summary
As of October 23, 2023, Palantir Technologies Inc. (PLTR) exhibits resilience in the market but has a negative EPS, leading to skepticism and a wide range of analyst price targets; while technical analysis suggests a positive outlook and active trading, the mixed indicators recommend holding PLTR until upcoming earnings provide more clarity on the company's growth trajectory.
Fundamental Analysis
Palantir Technologies Inc. (PLTR) with a market capitalization of $34.86 billion, has been somewhat volatile recently. For this analysis, the main focus will be on its fundamentals, alongside latest news surrounding the company.
While the overall market dipped on October 23, 2023, Palantir exhibited resilience and recorded a marginal increase of 0.56%, closing at $16.20. This move represents market sentiment about the company's ongoing business strategies and financial health. However, a potential concern lays in the company's negative earnings per share (EPS) of -$0.02, indicating a lack of profitability.
One of the bullish points is Palantir's innovative artificial intelligence strategy. The company is giving prospective customers an opportunity to test its AI products. This not only exhibits confidence in their product but also could potentially lead to a significant growth due to an expected increase in customer reliance on the company's services.
However, the company's approach has not won over all analysts. Despite Palantir's strategies, there are increasing fundamental concerns and questionable forward growth expectations about the company. This skepticism is reflected in the varied analyst price targets on this stock, with a range between $4.5 and $25. The median target is $9.5, which is significantly lower than the current trading price.
When it comes to future earnings, the earnings announcement is expected on November 2, 2023. This could be a potential catalyst for the stock's overall market performance in the near future.
Technical Analysis
The Moving Average Convergence Divergence (MACD) three-month figure of 0.96188 is positive, indicating a bullish trend. Palantir's current price is above both its 50-day and 200-day moving averages ($15.61 and $12.17, respectively) which suggests a positive outlook among investors.
The RSI index at 61 suggests the stock is neither overbought nor oversold, implying that there might not be any drastic changes in the near term. An average trading volume of 61.55 million shares indicates active trading, contributing to the price volatility.
The key resistance point is identified at $17.04, while the support stands at $15.41. The Average True Range (ATR), a measure of volatility, is 5.59.
Conclusion: Stock Evaluation
Given the mixed indicators from both the fundamental and technical analysis, the consensus recommendation is "Buy", with seven analysts voting for "Buy," three analysts recommending "Sell," and one maintaining a "Hold" stance.
With the stock trading above its 50-day and 200-day moving averages showing bullish signs on one hand, and having mixed views from the market with bearish outlook from some analysts, considering the median price target which is below the current price, it's advisable to "Hold" PLTR at this point until more clarity can be obtained from the upcoming earnings results. This hold recommendation is due to the expectation that the future earnings announcement might provide a clearer picture of the company's growth trajectory.
