Palantir Technologies (PLTR) Shows Significant Surge, But Risks Still Exist

Overview

Palantir Technologies Inc., ticker "PLTR", closed at $17.40 on July 17, 2023, on the NYSE. The stock saw a significant 6.10% increase from the previous day's close, with a change of $1.00. This surge was a new high for the year, exceeding the previous year high of $17.59. The day saw trading volumes of 62.77 million shares, lower than the average volume of 75.82 million shares. The company's market cap, as of this close, stood at $36.86 billion.

Trend Analysis

The last close price showed that the company has recovered significantly from its year low of $5.92, now standing almost 200% higher. The 50-day moving average at $13.53 and the 200-day moving average at $9.22 indicate a positive trend, with PLTR currently trading well above these averages.

The MACD (3-month) at 0.030726 is showing positive momentum, which might suggest more upward movement. However, the high RSI of 82 might be a warning sign, as RSI values above 70 typically indicate overbought conditions, hinting at a potential pullback or correction.

Fundamentals and News Sentiments

The company's EPS for the period is at -$0.12, indicating losses. The PE ratio being -145, backs up the negative earnings. The company has 2.12 billion shares outstanding.

Various news pieces surfaced, including topics concerning Palantir's aggressive pursuit of the AI opportunity, its recent acquisition of additional shares in Rubicon Technologies, and a price target increase by Mizuho. This news must be taken into consideration, as these developments could impact the future performance of the stock, allowing Rubicon and AI opportunities to potentially drive growth for the company.

The DCF analysis estimates a value of $18.66 per share, which is higher than the last close price of $17.4. This could suggest the stock is currently undervalued.

Price Targets and Predictions

Despite the positive DCF analysis, the median consensus among analysts places the target price at $8, which is a significant undervalue against the current price. The highest and lowest target estimates stand at $16 and $4.5, respectively.

Considering these factors, along with the general uptick in the market's perception of the company evidenced by the recent news and the positive trend, a mild bullish sentiment could be expected for the next trading day, July 18, 2023, and throughout the upcoming week. However, it must be considered that the very high RSI and the negative EPS might make this a risky prospect, and a close eye should be kept for any signs of a potential reversal.

Evaluation and Recommendation

In light of the above analysis, the unpredictability of the PLTR stock, combined with the negative EPS and the high RSI, suggests a potentially risky proposition. However, the company’s aggressive pursuit of AI opportunities, its strategic acquisition of a more significant stake in Rubicon, and the recent bullish trend could provide some potential rewards.

Despite the promising prospects, the current valuation suggests an overbought condition, which could result in a short-term pullback. Bearing this in mind and considering the negatives such as the negative EPS, the PLTR stock might fit best under a Hold category, suggesting that new investors might want to wait for a more favorable entry point, while current investors could continue to hold and observe.