14-day Premium Trial Subscription Try For FreeTry Free

Palantir Technologies Inc. (PLTR) Technical Analysis and Fundamental Overview: June 3, 2024

StockInvest.us, 2 weeks ago

Palantir Technical Analysis

Palantir Technologies Inc. (NYSE: PLTR) closed at $21.32 on June 3, 2024, marking a decline of 1.66%. The trading session observed a low of $21.01 and a high of $21.79. Notably, the stock's support level is pinpointed at $21.14, while its resistance stands at $21.40, suggesting critical levels for near-term technical moves.

The Relative Strength Index (RSI14) at 55 aligns with a balanced market sentiment, neither excessively overbought nor oversold. Combined with the Moving Average Convergence Divergence (MACD) of -0.40, it indicates a mildly bearish momentum. The Average True Range (ATR) suggests significant volatility, with a value of 3.81, though recent volumes of 31.48 million fell below the average of 48.89 million, hinting at a potential slowdown in trading activity.

The 50-Day Moving Average of $22.19, sitting above the last close, signifies a bearish short-term outlook. However, the 200-Day Moving Average at $19.33 remains supportive of a positive long-term trend, given the stock's current level exceeds this mark.

Fundamental Analysis

Palantir boasts a market capitalization of $45.42 billion, reflecting its substantial footprint in the technology sector. Its Price-to-Earnings (PE) ratio stands at a lofty 177.67, which suggests overvaluation concerns among some investors. An Earnings Per Share (EPS) of $0.12 underscores a relatively modest profitability compared to the valuation.

Palantir The company's fundamentals are bolstered by a positive news flow, particularly Cathie Wood's continued investment, which has historically influenced the stock favorably. The recent financial update, while not impressing some investors, hasn't deterred significant buy positions. Additionally, Palantir's new AI platform launch and strategic deals further drive growth prospects.

Regarding future valuation, analyst targets vary widely, with a high of $35 and a low of $4.5, averaging to a consensus of $15.25. The discounted cash flow (DCF) valuation of approximately $0.61 implies a significant discrepancy when compared to the market price, suggesting potential overvaluation.

Predictions and Intrinsic Value

For the next trading day, minor volatility within the support ($21.14) and resistance ($21.40) levels might shape the price movements. The one-week outlook remains cautiously bearish or stable, considering the bearish MACD and underperformance vis-à-vis the 50-Day Moving Average.

Intrinsic value assessment (DCF at $0.61) implies that Palantir is priced significantly above its calculated intrinsic value, reflecting a high speculative premium. The long-term investment potential is underpinned by robust business expansion and AI capabilities, yet the current high valuation poses notable risk.

Overall Evaluation

Given the data, Palantir Technologies Inc. emerges as a "Hold" candidate. This stance balances the positive longer-term growth prospects and significant institutional interest against the present overvaluation concerns and modest short-term technical indicators. Investors should stay cautious of the inherent volatility and closely monitored upcoming earnings and strategic updates.

Check full Palantir forecast and analysis here.