Palantir Breakout: Navigating the Bullish Surge 1DTechnical Analysis: Palantir (PLTR)
Timeframe: Daily
Chart Pattern: Resistance breakout
Breakout Level: $20
Target Price TW : Max 25 Avg 15.66
Breakout Point: There appears to be a breakout at the resistance level, which was previously set around $20.00. The price has moved above this level and is currently at $20.49, indicating a successful breakout.
Indicators / patterns:
The Moving Average Convergence Divergence (MACD) is bullish, and the Relative Strength Index (RSI) is oversold.
Candlestick patterns:
Long Lower Shadow Pattern: This pattern occurs when the market shows a significant sell-off during the period, but then buyers push the price back up near the opening level. The result is a candlestick with a small body and a long lower shadow (wick) that significantly extends below the body. Rejection of Lower Prices: The long lower shadow indicates that there was a rejection of the lower prices, suggesting that the buyers are coming into the market and there is buying interest at those lower price levels.
Fundamentals/events:
A comprehensive overview of Palantir's financial performance in Q3 2023, including forecasts for Q4 and the full year (FY) 2023:
1. Investment and Operating Income: The company continues aggressive investments in AIP and the US, achieving an adjusted operating income of $163M with a 29% margin.
2. Customer Growth: There's significant growth in customer count, up 34% year-over-year (YoY), and commercial customer count, up 45% YoY.
3. Deals Closed: 80 deals were closed during Q3, with 29 deals worth at least $5 million and 12 deals at or above $10 million.
4. Financial Positio: The ending cash position for Q3 stands at $3.3B, including cash, cash equivalents, and US Treasury securities, with no debt.
5. Profitability: Palantir achieved GAAP profitability for the third consecutive quarter, with a GAAP net income (loss) chart showing consistent improvement over the quarters.
6. Revenue Growth: U.S. Commercial and Government revenue grew significantly, with total revenue growing 1% YoY, driven by the acceleration of the U.S. commercial business.
7. Top Customer Revenue and Billings: Average trailing twelve months (TTM) revenue per top 25 customers increased, and billings grew by 36%.
8. **Forecasts**: For Q4 2023, revenue is expected to be between $599M - $603M, with adjusted income from operations of $184M - $188M. FY 2023 revenue guidance has been raised to $2.216B - $2.220B, with adjusted income from operations expected between $607M - $611M. GAAP net income is expected in each quarter of the year.
This snapshot indicates robust financial health, significant growth in customer base, and a strong focus on profitability moving forward.
Oppurtunity:
Palantir's stock price has tripled this year.
Strong fundamental results and optimism over generative AI have driven the company's stock price performance.
Investors are now questioning whether the rally can continue amidst rising interest rates.
Some positive factors to consider include expected revenue growth in FY24 and a strong position in the government contracting market.
Potential headwinds include the overall market environment and the possibility of higher valuations.
Risks:
Palantir shares could have a fail to break above $20 and fall back to lower levels.
The overall market could experience a downturn, which would weigh on Palantir shares.
A false breakout occurs when the price of a stock moves beyond a defined support or resistance level, signaling a potential trend reversal or continuation, but then reverts back.
Disclaimer:
This is not investment advice. Please do your own research before making any trading decisions.
