Stocks broke their six-day losing streak with a strong rally on Friday. Always volatile stocks had fallen more than 30% in six days, dragged down by disappointment with the company’s fourth-quarter financial results and the recent expiration of its post-IPO lockdown period for investors.
The Wall Street Journal’s Heard on the Street column notes Friday that the stock has been embraced by the Reddit WallStreetBets crowd, the same group of individual investors that boosted
shares (ticker: GME) rose parabolically last month.
On Tuesday, Palantir (PLTR) posted revenue of $ 322 million for the December quarter, up 40% from a year ago and well ahead of the street consensus at $ 300.7 million. The company reported a non-GAAP profit of six cents a share, ahead of the Street consensus by two cents. Under GAAP, the company lost eight cents a share. Palantir said government customer revenue was $ 190 million, up 85% from the previous year, while business revenue was $ 132 million, just 4%.
The big data analytics company said it expects 45% revenue growth for the first quarter. Palantir continues to expect revenue growth of more than 30% for the full year and announced a new revenue target of more than $ 4 billion by 2025.
Street reaction to the results was mixed. As reported Wednesday, the stock was updated after gains by
to Buy from Neutral, with a new price target of $ 34, while William Blair went to Underperform from Market Perform, stating that the stock is not sufficiently priced at risk. Citigroup analyst Tyler Radke repeated his sell rating and $ 15 target, stating that “the stock is overvalued considering reduced growth drivers and increased quality issues with increased government exposure.” .
Credit Suisse analyst Brad Zelnick repeated his underperforming rating this week, setting a price target of $ 20. He wrote in a research note that the fact that the company beat estimates for the quarter but did not push the guidance for 2021 “leaves doubt on the potential magnitude of the growth slowdown in the second half.” And he adds that the lack of a full-year margin guidance “calls into question the sustainability of the recent margin expansion as Covid-related savings return. [like many IT services companies, the company reduced travel spending during the pandemic] and the company aggressively invests in direct sales. “
Trading activity in this stock has skyrocketed this week ahead of Thursday’s lockdown expiration. Nearly 308 million shares were traded on Thursday, the highest total in history, aside from the day the shares were listed on Sept. 30, when 339 million shares changed hands. Friday will be the fourth consecutive day with trading of at least 149 million shares.
Palantir’s stock opened to trade at $ 10 last year. The stock in recent weeks has been highly volatile, trading as high as $ 45 on an intraday basis on January 27. After closing at $ 38.17 on February 9, the stock plummeted six days before today’s rally. On Friday, Palantir shares rose 13% to $ 28.37. At that level, the company is valued at roughly $ 53.5 billion, or roughly 36 times the consensus street revenue estimates for 2021.
Write to Eric J. Savitz at [email protected]