Sign InPalantir Technologies: New Partnership Fuels Positive Outlook Despite Bearish Move
Summary
Despite a recent decrease in stock price, Palantir Technologies Inc. shows potential for future growth with a new partnership and steady performance in the AI technology space, making it a 'Hold' for existing investors and a 'Buy' opportunity for potential investors looking for long-term growth. (Analysis conducted on August 9, 2023)
Summary
Palantir Technologies Inc. (ticker: PLTR) is a software company that specializes in big data analytics. The company's latest closing price stood at $15.25 on August 9, 2023, marking a decrease of 10.50% (-$1.79) from previous trading day. Despite this recent bearish move, the company news suggest a positive outlook, especially with the securing of a new partnership that increases its sector exposure. In this report, the analysis of the technical and fundamental data of Palantir Technologies Inc., along with the latest news is conducted. The goal is to predict future stock performance and make recommendations.
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Fundamental Analysis
Palantir Technologies Inc., listed on NYSE, has a market capitalization of approximately $32.31 billion. The company currently has a total of roughly 2.12 billion shares outstanding. Palantir's last reported EPS stands at -$0.12, resulting in an unattractive PE ratio of -127.08. It appears that the company is not profitable yet, as indicated by the negative EPS. It's important to note that the company's PE is significantly skewed due to the negative earnings.
The key takeaway here is that Palantir's fundamentals are underwhelming from an earnings perspective. However, an important piece of news indicates a new partnership with Azule Energy, which could give the company valuable traction in a new market sector, and this potential upside could offset some of the immediate financial concerns.
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Technical Analysis
In terms of technical indicators, the Palantir stock has an RSI14 (Relative Strength Index) of 41, which is close to the oversold territory (below 30). Hence, the stock can potentially rebound in the near term given that it's being oversold.
The 50-day moving average for Palantir stands at $16.13, above its current price, suggesting bearish trend in the short term. However, the 200-day moving average at $10.04, substantially lower than the current price, indicating a bullish trend in the longer term.
The MACD (3-month) stands at 0.84 indicating a possible bullish momentum in the future. The Average True Range (ATR) stands at 7.92, which could indicate a higher level of volatility. The next level of support and resistance are at $14.71 and $16 respectively.
The stock's recent low was $15.1 and the high was $16.92. The highest recorded price in the past year was $20.24 and the lowest at $5.92.
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Earnings Outlook
The company's next earnings announcement is on November 6, 2023. Given the generally positive sentiment toward AI stocks, the new deal with Azule Energy, and Palantir's consistent success in data analytics and AI technology, the earnings announcement holds the potential for positive surprises.
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Price Prediction
Using Discounted Cash Flow (DCF) analysis, a fair stock price of $16.51 is derived for PLTR. In the upcoming trading day, given the oversold nature of the stock, combined with positive news sentiment, the stock price might edge towards this calculated fair value. For the upcoming week, with the possibility of further details about the new partnership deal coming out, combined with currently oversold RSI, a prediction of a moderate rise towards $16.5 to $17.5 (DCF and 50-day MA) is feasible.
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Final Evaluation
Despite the lack of profitability as indicated by negative EPS, Palantir Technologies Inc. presents an interesting investment opportunity due to their steady performance in the AI technology space and the new partnership deal with Azule Energy.
Given the current analysis, the stock can be considered as a 'Hold' for existing investors as it seems to be at a transition point in the market but not yet significantly bullish. For potential investors looking for long term growth prospects, taking advantages of the dips for entry could present a reasonable 'Buy' opportunity because of the company's recent partnership and AI positioning in the market. However, short-term traders may need to exercise caution due to the volatility and bearish short-term trend signified by the recent price decrease and placement below the 50-day moving average.
