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Palantir’s shares will yield ground before rising significantly
Shares of Palantir Technologies (NYSE: PLTR) in data mining software began trading on the Big Board on September 30 after a direct public offering (DPO). In this direct listing, there was no offer of new shares of Palantir. 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 reference price of $ 7.25 per share, but on its first trading day, Palantir shares opened at $ 10 and closed at $ 9 , 50. On November 27, Palantir shares reached a record high of $ 33.50 and are now flirting with $ 25.InvestorPlace – Stock market news, stock advice 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 one of the first to support Facebook (NASDAQ: FB). Palantir’s early work, especially with government agencies like the Central Intelligence Agency (CIA), was considered controversial and even secret. Ranking 10 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 may consider any drop to $ 22.5 or even less as an opportunity to enter into a long-term position with PLTR shares. Here’s why. Government contracts and Palantir shares Since 2003, Palantir has expanded its customer base to other governments such as private companies. For example, in November 2019, Palantir and Japan-based insurance company Sompo (OTCMKTS: SMPNY) formed a joint venture. Then, in June 2020, they launched the “Real data platform for safety, health and well-being”. Recent academic research by Roxana Akhmetova of the University of Oxford claims that “the partnership is problematic” because Thiel is a Trump adviser. In September, Palantir received a $ 44.4 million three-year contract with the U.S. Food and Drug Administration (FDA). It will provide data analysis and management services to the FDA’s Drug Research and Evaluation Center (CDER), which focuses on potential new drugs. In early December, Palantir announced cooperation with the Greek government. The country is working to improve its COVID-19 response efforts, integrating more data and analysis into the decision-making process. Recently, Palantir developed a tool for the United States government to monitor the manufacture of vaccines against coronavirus, as well as their distribution. The UK National Health Service has also been working with Palantir. In the summer, CNBC reported, Britain’s NHS gave Palantir access to millions of private personal data from UK residents. Palantir recently signed a two-year contract with the NHS. It will now provide the organization with a software platform for data processing. In fact, a recent press release from the company highlights, Palantir is “supporting a wide range of institutions while responding to the COVID-19 pandemic and adapting for the future”. How Palantir’s Recent Profits Arose In mid-November, Palantir released its third quarter results. Revenue was $ 289.4 million, an increase of 52% Y / A. Net loss of $ 853.3 million translated into diluted net loss per share of 94 cents. As of September 30, the total cash and cash equivalents was $ 1.8 billion. Management raised the revenue orientation for the whole of 2020 to a range of $ 1.070 billion to $ 1.072 billion, an increase of 44% Y / A. The company emphasized its international expansion in the quarterly balance sheet. Co-founder and CEO Alexander C. Karp quoted: “Sompo’s work is vital to the well-being and safety of Japan, and Kengo Sakurada, the chief executive of the company’s group, has been a critical and reliable partner while working with Sompo to expand our reach in Asia. “The P / L, P / S and B / W ratios of Palantir’s stock are 208.33, 42.58 and 37.0, respectively. The PLTR stock is frothy, even for a growth stock capable of obtaining an important number of government contracts. Given the metrics, it is currently one of the most expensive software stocks on the market. For example, the subsequent P / E and B / W ratios for the SPDR S&P Software & ETF Services (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 valued and expensive. long-term investors may consider buying the dives, especially if the price drops to US $ 22.50. Are you currently a shareholder? You can think about starting a covered buy position in PLTR shares. So, you could possibly protect some of your profits on paper. For example, an ATM covered call that expires on January 15 would decrease the portfolio’s volatility and offer some protection against losses. Investors may also consider an exchange-traded fund (ETF) that also holds Palantir shares in its portfolio. Examples include Renaissance IPO ETF (NYSEARCA: IPO), First Trust US Equity Opportunities ETF (NYSEARCA: FPX), Vanguard Mid-Cap ETF (NYSEARCA: VO), 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 did not (directly or indirectly) hold any positions in the securities mentioned in this article. Tezcan Gecgil has worked in investment management for more than two decades in the United States and the United Kingdom. In addition to formal higher education in the field, she also completed all 3 levels of the Chartered Market Technician (CMT) exam. His passion is options trading based on the technical analysis of fundamentally strong companies. She especially likes to make weekly covered calls for income generation and publish educational content on investment. More from InvestorPlace Why everyone is investing in 5G EVERYTHING WRONG Top Stock Picker reveals its next 1,000% winner New radical battery could dismantle the oil markets The Palantir Stock post will yield before moving noticeably higher appeared first on InvestorPlace.