Is Palantir Technologies a buy?
It’s time to break down a popular technology name. Here is the break down on $PLTR, otherwise known as Palantir Technologies.
Current Price: $23.05
52/Wk High: $45.00
52/Wk Low: $8.90
Market Cap: $41.3 Billion
Read below for the breakdown!
Palantir Technologies ($PLTR) is a major software company that builds and provides software solutions for human driven analysis of real-world data according to the company themselves.
Taking a look at Palantir, the company operates through two core segments, Commercial and Government, of which the Government segment is typically of major focus.
In recent news, Palantir made three major partnerships with 3M, Faurecia, and IBM. While the partnerships have been plentiful, Palantir stock has remained flat in recent months after a major pump months ago attributed to the so-called Reddit Rebellion.
Digging into the numbers, Palantir Technologies beat Q4 2020 expectations with an EPS of $0.06, better than the analyst’s EPS consensus estimate of $0.02.
Revenues grew significantly as well throughout the quarter, totaling $322 million in Q4, representing a strong 40% year-over-year revenues jump.
While revenues expanded throughout Q4, Palantir continued to run a loss from operations of $156.6 million which was partially due to stock-based compensations and employer-related payroll taxes.
As for income, Palantir reported an income from operations of $104.1 million and the company signed 21 contracts throughout the quarter, each of which is over $5 million in value.
Further sifting through the quarter, leadership noted that 12 contracts signed in Q4 were worth over $10 million each.
Taking a look at the full year, Palantir reported revenues of $1.1 billion, representing revenue growth of 47% year over year.
Furthermore, the average revenue per customer increased to $7.9 million, representing growth of 41% year over year in average revenues per customer.
As for guidance, management is bullish expecting FY 2021 revenues to grow by more than 30% year over year. Shifting into Q1 2021 guidance, leadership is expecting 45% revenue growth throughout Q1 and an adjusted operating margin of 23%.
Shifting into the balance sheet, the numbers are solid.
Total Debt: $198 Million
Total Liabilities: $1.168 Billion
Total Assets: $2.691 Billion
Cash & Short Term Inv: $2.011 Billion
On a valuation basis, Palantir does trade at a premium.
Forward Price to Earnings: 112.42x
Price to Sales: 39.18x
Price to Book: 27.38x
Given the numbers, the analysts are bullish with a mean price target of $25.83/share, representing a 12.79% upside.
The high price target is $40.00/share, representing a 74.67% gain, while the low price target is $15.00/share, representing a -34.50% downside.
The big money is less involved with just 18.18% of Palantir being owned by institutions. Top holders include Sompo Holdings, Disruptive Technology Advisors, and 72 Investment Holdings.
On a technical basis, Palantir could be flashing opportunity. According to the six-month charts, the MACD recently shifted back to the upside within minimal momentum within a tight range around -1.13.
The six-month charts are also indicating an RSI of 43.33 and a CCI of -43.60, both of which are on the low end.
In short, Palantir Technologies ($PLTR) is an intriguing long-term technology name that offers expanding revenues, a strong management team, and big government business that will likely continue for many years to come.
EAT - SLEEP - PROFIT
Disclaimer: This is not direct financial advice, simply an opinion based on independent research.