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Palantir Technologies began trading on the NYSE in September.
Michael Nagle / Bloomberg
Palantir Technologies
The shares broke their six-day losing streak with a strong recovery on Friday. The always volatile shares had fallen more than 30% in six days, dragged by disappointment with the company’s financial results in the fourth quarter and the recent end of its post-IPO blocking period for investors.
The Wall Street Journal’s Heard on the Street column points out on Friday that the stock was taken by the crowd of Reddit WallStreetBets, the same group of individual investors that spurred
GameStop
shares (ticker: GME) parabolically higher last month.
On Tuesday, Palantir (PLTR) recorded revenue of $ 322 million in the December quarter, a 40% increase from the previous year and well ahead of the $ 300.7 million Street consensus. The company reported a non-GAAP profit of six cents per share, ahead of the Street consensus of two cents. On a GAAP basis, the company lost eight cents per share. Palantir said government client revenue was $ 190 million, an increase of 85% over the previous year, while commercial revenue was $ 132 million, just 4%
The big data analytics firm said it expects revenue growth of 45% for the first quarter. Palantir continues to expect revenue growth of over 30% for the entire year and has announced a new revenue target of over $ 4 billion for 2025.
The street reaction to the results was mixed. As reported on Wednesday, the stock was updated post-profit by
Goldman Sachs
to Buy from Neutral, with a new target price of $ 34, while William Blair went to Underperform at Market Perform, saying the stock did not price the risks sufficiently. Citigroup analyst Tyler Radke repeated his $ 15 target and Sell rating, stating that “the shares are overvalued, considering the narrowing of growth engines and the increase in quality problems with greater government exposure”.
Credit Suisse analyst Brad Zelnick repeated his Underperform rating this week, setting a target price of $ 20. He wrote in a research note that the company’s surpassing estimates for the quarter, but did not driven by the 2021 orientation “leaves lingering doubts about the potential magnitude of the slowdown in growth in the second half”. And he adds that the lack of margin guidance for the entire year “questions the sustainability of the recent margin expansion, as Covid-related economies return [like many IT services companies, the company reduced travel spending during the pandemic] and the company aggressively invests in direct sales. “
Trading activity on that stock soared this week, before Thursday’s blockade expired. Nearly 308 million shares were traded on Thursday, the highest total ever recorded on September 30, when 339 million shares changed hands. Friday will be the fourth consecutive day with trading of at least 149 million shares.
Palantir’s shares opened for trading last year at $ 10. The shares have been highly volatile in recent weeks, trading at $ 45 intraday on January 27. After closing at $ 38.17 on February 9, the stock plunged six days before today’s recovery. On Friday, Palantir’s shares rose about 13% to $ 28.37. At that level, the company has an appraisal of about $ 53.5 billion, or about 36 times the consensus of Street’s revenue estimates for 2021.
Write to Eric J. Savitz at [email protected]