Long
PLTR - Analysts target middle of 2021 Range
Palantir has been on a tear after consolidating in tight ranges around its lows from May 2022 - 23. The stock looks set to re-enter its previously accepted price range from late 2020 - 21 and analysts are targetting the middle of that range. This was a typical consolidation breakout in May, and the strength of the trend since then has me inclined to agree with the analyst's target in the medium term.
Leadership + Positioning
Partnerships + Market Conditions:
- Analysts from Wedbush Securities predict Palantir stock price to reach $25 in the next year, as Daniel Ives made headlines this week with a buy rating and an outperform rating.
- The stock price has surged this year, increasing by >150% in the first half of 2023 and >200% over the past six months, despite decelerating growth.
- Palantir hit a 52-week intraday high on July 19
- Despite its successful trajectory, the company's high trailing sales multiple (19x) versus its projected sales growth (16% for 2023) could be cause for concern for some.
Leadership + Positioning
- Palantir, led by CEO Alex Karp, is considered a leader in the AI industry and is poised to become one of the biggest players in the coming decade.
- Karp is a proponent of rapid AI development and sees AI as a major force in shaping political developments in this century.
- Palantir faces stiff competition from Booz Allen in the government market, but its experience in this sector, especially in defense and AI applications, gives it an advantage over competitors.
- PLTR is also recognized as one of the top three providers of AI/ML platforms by Forrester and ranked #1 in a worldwide AI software study by Gartner.
Partnerships + Market Conditions:
- Palantir has significant expansion opportunities, thanks to partnerships across public and private sectors, and is leveraging its AI expertise with new partnerships and applications.
- The company has expanded into healthcare, energy, and manufacturing, and has partnered with Toronto-based startup AirMatrix and extended its partnership with Concordance Healthcare Solutions.
- Almost 60% of Palantir's revenue is generated from government agencies, and the company has experienced a consistent 35% YoY growth in this business for the past ten years.
- Overall market conditions are favorable, with tech stocks poised to rally further as the AI revolution progresses and the Nasdaq in solid uptrend territory. Palantir is attracting attention from retail investors and mainstream media and is considered a good valuation with favorable risk-reward.
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