Let’s talk about Palantir Technologies Inc. (PLTR). Yesterday, the stock took a small hit – a 0.83% drop, landing at $23.80 by market close. This might not seem like a lot, but when compared to the S&P 500’s growth of 0.57%, the Dow Jones’ 0.83%, and the Nasdaq Composite’s 0.39%, it’s not a great look.
Over the past month, Palantir’s shares have depreciated by 1.8%. That’s compared to the S&P 500 and the Business Services sector growing 2.97% and 2.03% respectively. Simply put, Palantir isn’t exactly keeping pace with its peers. This has investors and market analysts questioning the stability of the stock.
So, what’s causing the rocky performance? It’s hard to say without taking a closer look at the company’s upcoming financial statements. However, it’s clear that a reassessment of investment strategies might be in order for those with a stake in Palantir.
On the bright side, the company is expected to post an earnings per share (EPS) of $0.08 in its next earnings report. That’s a sizable 60% increase from the same period last year. Also, revenue is anticipated to hit $614.88 million, or a 17.08% increase year-over-year.
Projections for the next fiscal year are looking optimistic as well, anticipating earnings of $0.33 per share along with a revenue of $2.68 billion. These predictions are equivalent to growth rates of 32% and 20.56% respectively from the previous year.
Despite these promising predictions, it’s important to remember that analysts frequently adjust their forecasts based on short-term business trends. These revisions can significantly sway shareholder sentiment, affecting short-term share price actions. Paying attention to analysts’ predictions could prove beneficial for both short and long-term investors.
Last thing to mention – Palantir currently has a Forward P/E ratio of 73. That’s a lot higher than the sector average of 25.99. This means that despite the company’s growth potential, it’s trading at a significantly higher earnings multiple than usual. So, while the Technology Services industry and the broader Business Services sector continue to do well, Palantir’s stock could be overvalued. Something to consider, yes?
