Sign InPalantir's Stock Shows Potential for Growth Amidst Divided Market Sentiment
Summary
Palantir Technologies Inc. (PLTR) operates in the technology sector and trades on the NYSE, and while recent partnerships and positive momentum suggest potential for growth, high RSI and low consensus estimates indicate the stock may be due for a correction, making it a 'Hold' for now, with investors advised to closely track corporate events and market developments for future decisions.
Fundamental Analysis
Palantir Technologies Inc. (PLTR) operates in the technology sector and trades on the NYSE. It closed at $16.59 as of July 12, 2023. The market capitalization of the company stands at approximately $35.14 billion, with about 2.12 billion outstanding shares.
The earnings per share (EPS) for the company is -$0.12, indicating that the company is operating at a loss. This results in a negative Price to Earnings Ratio (P/E) of -138.25, making it difficult for potential investors to measure its relative value in comparison to other companies or the market as a whole.
The discounted cash flow (DCF), representing the intrinsic value of the stock based on its expected future cash flows, is $17.85. This is higher than the current price, which might indicate that the stock is undervalued.
However, investors' consensus estimates far on the conservative side of the current price with a target median price of $8 and target consensus price of $9.45, indicating that market sentiment around the stock is divided.
The company has a scheduled earnings announcement on August 7, 2023. Investors should closely track such corporate events as they can impact the stock's price.
Technical Analysis
The 14-day Relative Strength Index (RSI) stands at 71, indicating the stock may be overbought. Overbought conditions often precede a price reversal or consolidation.
The 50-day moving average of $13.00 and 200-day moving average of $9.08 are both significantly below the current price, indicating a positive price momentum in recent times. The Moving Average Convergence Divergence (MACD) stands at 0.01, which can signify a bullish market in terms of the stock's price.
Despite the relatively high average trading volume of about 74.88 million trades per day, the volume on July 12 was only about 49.63 million, implying a possible slowdown in trading activity.
News and Events
Recent relevant news headlines suggest that Palantir has been on a strong rally recently, with the stock rising almost 130% over the past 10 weeks. The company has also recently announced a new partnership with AirMatrix and expanded a key distribution deal with Carahsoft, both of which could potentially fuel further growth.
Prediction and Evaluation
Given the strong rally and recent partnerships, the stock appears to still have some positive momentum. However, the relatively high DCF compared to the current price suggests some potential for growth. In contrast, the high RSI, paired with the low and divergent consensus estimates, signal that the stock might be due for a correction.
In the shorter term, for the next trading day, July 13, there doesn't appear to be any individual news items that might significantly swing the stock price. Consequently, barring any unstated shocks, the stock price is likely to remain fairly stable.
For the upcoming week, the consolidating volume and high RSI may result in a possible pullback or an extended period of price consolidation.
Final Evaluation
Considering both the technical and fundamental analysis, Palantir (PLTR) can be viewed as a 'Hold' for now. Investors should pay close attention to upcoming corporate events and market developments before making further decisions regarding this stock.
