Palantir Stock, IBD Stock Of The Day, Claws Back As Other Top Software IPOs Struggle
Palantir TechnologiesClA
Palantir TechnologiesClA
PLTR
$6.60
25.4%
121%
IBD Stock Analysis
- Recent IPO revived itself; Relative Strength Rating is 96 out of 99
- Stock rebounded, is extended from its 10-week moving average
- Shares also are forming a cup base with an entry point of 33.60
Industry Group Ranking
Emerging Pattern
Pullback
* Not real-time data. All data shown was captured at
1:45PM EST on
01/22/2021.
Palantir Technologies (PLTR) marked one of last year’s biggest initial public offerings among software companies with C3.ai and Snowflake stock among them. Now Palantir stock is the IBD Stock of the Day as the provider of data analytics software becomes actionable after reversing a downward trend.
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Palantir, Snowflake (SNOW) and C3.ai (AI) are three software growth stocks that corrected in late 2020 as some analysts questioned high valuations following their big IPOs. But Palantir stock has clawed back.
Palantir now boasts a Relative Strength Rating of 96 out of a possible 99. Meanwhile, Snowflake stock holds an RS Rating of only 23. And C3.ai owns an RS Rating of 83.
A direct listing of Palantir stock was launched on Sept. 30 priced at 7.25 a share. In a traditional IPO, companies create new shares, underwrite them and sell them to the public. A direct listing creates no new shares and sells only existing, outstanding shares with no underwriters involved.
Palantir formed an IPO base shortly after the direct listing.
Palantir Stock: Government Agencies Are Biggest Customers
In early January, Palantir stock rebounded from a pullback to its 10-week-moving average. While it’s extended from that entry point, Palantir is actionable from breaking its downward trend, unlike Snowflake stock or C3.ai stock. Shares catapulted 25.4% higher to close at 32.58 on Friday.
Palantir also is forming a cup base with a 33.60 buy point.
Palantir sells data analytics software primarily to U.S. government agencies.
Further, Palantir stock aims to grow its commercial business. The software maker also aims to expand into health care, energy, and manufacturing sectors.
Palantir on Jan. 26 plans to demonstrate its two primary software platforms, Foundry and Gotham, to the general public. The demos will include examples of how Palantir’s commercial and government customers — including manufacturers, defense agencies, and others — use its software.
“Gotham and Foundry enable institutions to transform massive amounts of information into an integrated data asset that reflects their operations,” said Daniel Morgan, senior portfolio manager at Synovus Trust, in a recent report. “Like a typical consulting firm, Palantir deploys specialists called ‘forward deployed engineers’ who spend weeks, months or years customizing a client’s software to meet a particular need.”
Palantir Not Profitable, Big R&D Expenses
Palantir has yet to turn a profit amid high research and development expenses. Like C3.ai, Palantir utilizes artificial intelligence software.
In addition, government agencies use Palantir software for intelligence gathering, counterterrorism and military purposes. Customer concentration has been one issue for Palantir stock.
Based in Palo Alto, Calif., Palantir is shifting away from multiyear contracts with upfront payments to annual recurring revenue.
Meanwhile, Palantir stock belongs to the IBD Leaderboard. The Leaderboard is IBD’s curated list of leading stocks that stand out on technical and fundamental metrics.
In the September quarter, revenue climbed 52% to $289.4 million. Palantir reported a loss of 94 cents per share, including stock-based compensation, using generally accepted accounting principles, or GAAP, accounting rules. In the year-earlier period, Palantir said it had a GAAP loss of 24 cents per share.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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