PLTR is properly valued and a solid growth investment. I’m going to jump into why I believe this to be the case. We are going to look at PLTR’s current valuation, recent earnings, and 7 key financial ratios. This is a fairly long analysis but if you’re thinking of investing in PLTR then you should have a decent understanding of why you decided to make this investment. Anyway, enough with the intro, let’s jump into the analysis.
If you’re not familiar with PLTR then here is a quick summary, feel free to jump past this part.
“Palantir Technologies Inc. builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations.”
PLTR Stock Recent Volume Comparison
I’m usually more of a fundamental investor but I also think there are some technical indicators that help provide additional; content when making an investment, which is why we will look at recent volume.
Comparing PLTR’s most recent volume to their average monthly volume can help us derive some valuable insights. Firstly, PLTR’s average volume over the past 2 trading days is sitting around 38.83M, which is lower than their average monthly trading volume of 54.2M.
PLTR’s low relative volume suggests that price movements are not expected to be as variable, which is unattractive for traders. This does not mean prices will not go up or down, but the movements/trends are likely to be less significant.)
PLTR Valuation and Stock Rating
Understanding the valuation of a stock is a useful check to see if the investment fundamentals are sound. I pulled the valuation and stock rating for a quick view to see if PLTR is considered undervalued or overvalued.
Analysts of PLTR have given an overall rating of 4, on a rating scale between 1 and 5, with 1 being the worst and 5 being the best. This overall rating consists of 3 different ratings, PE, ROE and DCF which I’ll get into below.
PE Rating : Currently, analysts have given PLTR a PE rating of 1. This is the lowest ranking and implies that the PLTR stock is currently overvalued. The PE rating factors in the trailing, current, and future PE Ratio of the PLTR stock. In the case of PLTR, analysts think that PLTR is overvalued given their P/E ratios, relative to the average P/E ratio of their peers.
ROE Rating : Currently, PLTR has been given an ROE rating of 3 by analysts. This is the average score achieved via an ROE rating. An average rating such as PLTR’s could also indicate that their management team is similar at managing inventory, cash flows, and business operations better than the management teams of PLTR’s peers.
DCF Rating : We have saved the best (and most influential) rating for last. PLTR has been given a score of 5 based on the quality of their DCF model (and projections). The DCF model is very commonly used by investors to value securities and is the de facto measurement of a stocks value. As a result of this, a high level of importance is placed on the company’s DCF models. With that being said, PLTR’s score of 5 is very good, implying the outlook for PLTR is very positive, and their stock is currently undervalued.
Based on these metrics we can see that PLTR seems to be undervalued and a solid investment. Considering these core metrics look good, I would be likely to take a position in PLTR. That being said, I want to look at some other metrics and factors.
Recent and Upcoming PLTR Earnings
Some people like to “play” earnings, but I tend to look at historical and upcoming PLTR earnings to analyze or re-analyze my investment. Typically, a beat will cause the price to jump, and a miss will lead to a drop, but we’ve seen a few cases recently where it’s been the opposite. Either way, let’s look at PLTR
Historically, PLTR has beat their earnings 33.33% of the time. This track record is not very good and allows us to assume that they are likely to miss their estimates. However, when PLTR beats their earnings, they tend to do so in a large way averaging a beat of 275%, which is a very significant amount.
PLTR’s most recent earnings release came on Feb 16th, 2022, in which PLTR reported an EPS of $0.02, which was -50% better than their EPS estimate of $0.04.
We can assume that PLTR will miss their next earnings based off of the probabilities. However I would not recommend betting against them going into earnings, as if they do beat you are likely to get burned in a bad way.
PLTR Stock Key Ratio Analysis
There are 7 main financial ratios that we are going to look at today. These ratios can help us to get a general idea of the financial health of the PLTR stock before we choose to enter into (or add to) a position. These ratios can help us to understand the current state of Palantir Technologies Inc.’s business, as well as what their future might look like.
Why I Think PLTR is Undervalued/Overvalued
Overall, I think that the PLTR stock is fairly valued . This is due to PLTR overall stock grade being ranked a 4 (indicating undervalued), their 33.33% track record of beating earnings (indicating potential overvaluation), and the fact that only 1/7 key ratios are good (indicating overvaluation).
Thanks for taking the time to read my analysis, please follow me for the latest investment insights and leave a comment if you have any questions or disagree with my thoughts — always open to a good discussion!
Originally published at https://utradea.com.
