Sign InSummary
As of July 5, 2023, Palantir's stock closed at $15.70 with a 1.55% increase, exhibiting volatility and attracting investor interest, and while the stock may see fluctuations on the next trading day, it is likely to trend upward in the upcoming week based on current momentum and DCF analysis; however, due to mixed signals, negative EPS, and potential risks, the final recommendation for Palantir's stock leans towards 'Hold'.
Introduction
The stock under analysis is Palantir Technologies Inc., a software company that focuses on big data analytics. Trading under the ticker "PLTR", Palantir's stock exhibits notable volatility in its prices, and consistently attracts investor interest due to its associated role with advancements in technology such as artificial intelligence.
Performance Overview
As of July 5, 2023, Palantir's stock closed at $15.70, reflecting an increase of 1.55% ($0.24). The stock has a 52-week range between a low of $5.92 and a high of $17.16, currently trading closer to the upper end of this range. The last trading volume noted was 38.17 million, below the average volume of 73.85 million, possibly indicating a subdued interest from traders on the specified date.
Technical Analysis
Palantir exhibits a Relative Strength Index (RSI14) of 47, a neutral indicator suggesting that the stock is neither overbought nor oversold. The Moving Average Convergence Divergence (MACD) 3-month stands at 0.61, which, being a positive figure, typically indicates bullish momentum. The 50-day moving average is at $12.36, and the 200-day moving average is at $8.92. Given that the current stock price ($15.7) is above these averages, it suggests a general upward trajectory in the stock's price.
Fundamental Analysis
Taking into account its fundamentals, Palantir is operating with a negative Earnings Per Share of -$0.12, and a negative Price to Earnings ratio of -130.83. This is a concerning signal and can imply the company isn't profitable. As of the last count, Palantir had over 2.12 billion outstanding shares. The market capitalization was roughly $33.26 billion.
Analysts have given a range of price targets, with the low end at $4.5 and the high end at $16. The consensus price target is $9.45, implying that the stock could be overvalued at its current price.
Company News and Outlook
Going by recent news, it is noted that Palantir is seeing a surge in demand due to advancements in artificial intelligence, potentially explaining the stock's price surge over 50% this year. Also, despite trading lower than its all-time highs, this news reflects the company's positioning as a leader in significant and rapidly growing markets in big data analytics.
Moreover, the company reported solid first quarter results and its first operating profit. While this is promising, the news suggests some market skepticism due to slowing revenue growth and potential overoptimism from the CEO.
DCF Analysis
The Discounted Cash Flow (DCF) analysis provides a per share value of about $16.96 for Palantir. This valuation suggests some potential upside from its recent closing price of $15.70.
Prediction
In light of the above, it's likely that the stock may see some fluctuations on the next trading day (July 06, 2023), mainly influenced by market sentiments and news. For the upcoming week, provided there's no adverse news affecting the company or market as a whole, the stock may trend upward, considering its current momentum and DCF analysis.
Final Evaluation
Considering Palantir's current positioning within its industry, outlook, and recent developments, the final recommendation for the stock right now leans towards 'Hold'. This is based on the mixed signals from the DCF analysis and analyst price targets, the key technical indicators, and the company's fundamentals, particularly the negative EPS. While the news presents a positive outlook, investors should closely monitor the company's future earnings reports and any potential negative drivers that could introduce more significant risk to its stock price.
