Palantir Stock Is Up Big Today: Is It a Buy?

Palantir Technologies (NYSE: PLTR) stock is posting big gains in today’s trading session. The big-data specialist’s stock was up roughly 6.5% as of 1:45 p.m. ET Monday.

The Nasdaq Composite was up roughly 2.4% at the same point in the day. In the absence of any company-specific news, positive momentum for the broader market is the hero today, and Palantir is rapidly gaining as investors move back into growth-dependent stocks.

A person looking at charts.

Image source: Getty Images.

How should investors play it?

Palantir went public late in September 2020, and the stock has seen volatile trading since its market debut. For risk-tolerant investors who see promise in the company’s data services, there’s probably little reason to look at the stock’s pricing gain today and be concerned that it’s too late to buy shares.

PLTR PS Ratio (Forward) Chart

PLTR P/S ratio (forward). Data by YCharts.

Palantir now has a market capitalization of roughly $27.2 billion and is valued at approximately 13.7 times this year’s expected sales. That’s admittedly still a growth-dependent valuation, but the company traded as high as 45 times forward sales expectations within the last year.

Today’s big gains actually look relatively muted in the context of recent volatility. In fact, Palantir stock trades down roughly 73% from the high it hit late last January even with the rally in Monday’s session.

Investors have become much more cautious about growth-dependent technology companies over the last year, and Palantir’s use of stock to compensate employees and fund operations isn’t sitting well with the market at a time when rising interest rates and other macroeconomic headwinds are on the horizon.

On the other hand, the data specialist has built an impressive list of government customers and has continued to attract private-sector clients at an encouraging clip.

Overall, I like Palantir’s chances of being a long-term winner, and big sell-offs over the last year have created a better buying opportunity for risk-tolerant investors. High-performance data gathering and analytics services will become increasingly crucial to public- and private-sector success, and the company’s early leadership could lay the groundwork for a powerful moat.

10 stocks we like better than Palantir Technologies Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now… and Palantir Technologies Inc. wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of January 10, 2022

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns and recommends Palantir Technologies Inc. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Source link

Leave a Reply

Your email address will not be published.