Palantir’s kick will give way before he moves considerably higher
Shares in data mining software company Palantir Technologies (NYSE: PLTR) began trading on the Big Board on September 30 following a direct public offering (DPO). No new Palantir shares have been offered in this direct listing. Instead, existing shareholders were allowed to sell their shares to new investors. Source: Sundry Photography / Shutterstock.com The New York Stock Exchange initially set a benchmark price of $ 7.25 per share, but on its first day of trading, Palantir stock opened at $ 10 and closed at $ 9.50. . On November 27, Palantir stock hit a record $ 33.50 and are now flirting with $ 25.InvestorPlace – Stock Market News, Stock Market Tips and Trading Tips Denver-based Palantir was founded in 2003 by a group of executives led by Peter Thiel, founder of PayPal (NASDAQ: PYPL). He was also an early supporter of Facebook (NASDAQ: FB). Palantir’s early work, especially with government agencies such as the Central Intelligence Agency (CIA), was considered controversial and even secret. 10 rating of the hottest SPACs of 2020 in preparation for the new year Today’s article looks at what investors can expect from the company. Although the PLTR is relatively overvalued, investors with a long-term horizon can view any decline to $ 22.5 or even below as an opportunity to go long on the PLTR stock. Here because. Government Contracts and Palantir Stocks Since 2003, Palantir has expanded its client base to other governments as private companies. For example, in November 2019, Palantir and Japan-based insurer Sompo (OTCMKTS: SMPNY) jointly formed a joint venture. Then, in June 2020, they launched the “Real Data Platform for Security, Health and Wellbeing”. Recent academic research by Roxana Akhmetova of the University of Oxford says the “partnership is problematic” because Thiel is an adviser to Trump. In September, Palantir was awarded a three-year contract worth $ 44.4 million from the US Food and Drug Administration (FDA). It will provide analytics and data management services to the FDA’s Center for Drug Evaluation and Research (CDER), which focuses on potential new drugs. In early December, Palantir announced a collaboration with the Greek government. The country is working to improve its COVID-19 response efforts by integrating more data and analytics into decision-making. Recently, Palantir developed a tool for the US government to monitor the production of coronavirus vaccines and their distribution. The British National Health Service has also partnered with Palantir. In the summer, CNBC reported that the UK’s NHS granted Palantir access to millions of private personal data residing in the UK. Palantir recently signed a two-year contract with the NHS. It will now provide the organization with a software platform for data processing. Indeed, a recent press release from the company highlights, Palantir is “supporting a wide range of institutions as they respond to the COVID-19 pandemic and adapt for the future.” How did Palantir’s recent earnings come in? In mid-November, Palantir released its third quarter results. Revenues were $ 289.4 million, up 52% year-on-year. Net loss of $ 853.3 million translated into a diluted net loss per share of 94 cents. As of September 30, total cash and cash equivalents were $ 1.8 billion. Management increased its full-year 2020 revenue forecast to a range of $ 1.070 to $ 1.072 billion, a 44% year-over-year increase. The company highlighted its international expansion in the quarterly statement. Co-founder and CEO Alexander C. Karp said, “Sompo’s work is vital to the well-being and safety of Japan and Kengo Sakurada, the company’s group CEO, has been a critical and trusted partner as we work. with Sompo to expand our reach in Asia. ” The P / E, P / S and P / B ratios of Palantir shares are 208.33, 42.58 and 37.0 respectively. The PLTR stock is frothy, even for a growth stock capable of obtaining a significant number of government contracts. Given the metrics, it’s currently one of the most expensive software stocks on the street. For example, the final P / E and P / B ratios for the SPDR S&P Software & Services ETF (NYSEARCA: XSW) are 30.62 and 6.63. The Bottom Line Palantir is a growing stock and is likely to create shareholder value for many years to come. However, it is highly regarded and expensive. Therefore, long-term investors might consider buying the dips, especially if the price falls towards $ 22.50. Are you currently a shareholder? You may be thinking about starting a hedged call position in PLTR shares. So, you may be protecting some of your paper profits. For example, a covered ATM call that expires on January 15th would reduce portfolio volatility and offer downside protection. Investors might also consider an exchange traded fund (ETF) that also holds Palantir shares in its portfolio. Examples include the Renaissance IPO ETF (NYSEARCA: IPO), the First Trust US Equity Opportunities ETF (NYSEARCA: FPX), the Vanguard Mid-Cap ETF (NYSEARCA: VO), the ARK Next Generation Internet ETF (NYSEARCA: ARKW) or the BNY Mellon US Small Cap Core Equity ETF (NYSEARCA: BKSE). As of the date of publication, Tezcan Gecgil held (neither directly nor indirectly) any position in the securities mentioned in this article. Tezcan Gecgil has worked in investment management for over two decades in the US and UK. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) exam. His passion is for options trading based on the technical analysis of fundamentally strong companies. She especially enjoys hosting weekly covered income-generating invitations and posting educational content on investments. More from InvestorPlace Why Everyone Is Investing In 5G Everything WRONG Top Stock Picker Reveals Its Next 1,000% Winner A Radical New Battery Could Dismantle Oil Markets Post Palantir Stock Is About To Lose Before It Moves Clearly Higher Has Appeared For first on InvestorPlace.