To The Moon

$Palantir Technologies Inc.(PLTR)$ have been rising by more than 40% since its earnings release. There have been a big BUY from Ark Invest at a price which is not low considering how Palantir have been trading.

So in this article, I would like to look at some indicators on whether Palantir could soar above $25 in the near term? Are we going to see another institution investing this AI company?

Guru Focus Say Palantir is Overvalued. Do you agree?

GuruFocus has indicate that Palantir is significantly overvalued, but if we consider how the stock price have been trading and the amount of investors equity raised through these purchase of shares.

Is Palantir still considered overvalued? I would think the company is “on the golden track to success.” And Palantir will be a prime beneficiary of the proliferation of the technology.

The ability to parlay its experience with handling information to create and sell “AI solutions powered by high-quality data. Palantir has a great deal of experience with enabling its clients to combine artificial intelligence and human intelligence in order to obtain information.

At this stage of the AI revolution, Palantir is just scratching the surface of the opportunity that the AI revolution has handed it.

Investors To Look Out For These

Palantir is indeed benefiting from the proliferation of AI, but it is important to watch Palantir’s press releases and, of course, its quarterly financial results.

For example, if we look at the recent financial results, we could see that their gross profit is pretty impressive at $1.5B, but if we look further into its total operating expense, the portion on SG&A is $1.3B, this is one area that Palantir might want to look into.

SG&A includes all non-production expenses incurred by a company in any given period. It includes expenses such as rent, advertising, marketing, accounting, litigation, travel, meals, management salaries, bonuses, and more. On occasion, it may also include depreciation expense, depending on what it's related to, for Palantir depreciation expense might not be applicable now.

I believe this SG&A cost could be managed well, as we can see the components in it are tangible items. Once we could see this improvement in SG&A, Palantir could go even higher than $25.

Investors Stockholder Equity vs Total Assets

The shareholder equity ratio shows how much of a company's assets are funded by issuing stock rather than borrowing money.

Palantir Technologies has a total shareholder equity of $3.6B and total debt of $0.0, which brings its debt-to-equity ratio to 0%. Its total assets and total liabilities are $4.5B and $961.5M respectively. Palantir Technologies's EBIT is $120.0M making its interest coverage ratio -0.9. It has cash and short-term investments of $3.7B.

Short Term Liabilities: PLTR's short term assets ($4.1B) exceed its short term liabilities ($746.0M). Long Term Liabilities: PLTR's short term assets ($4.1B) exceed its long term liabilities ($215.4M).

Palantir Performance On SMA 50-day Period

Palantir have been trading below the 50-day period, and the recent earnings have make it surge above the period, question whether Palantir could continue to trade above the 50-day period, will remain how traders and investors sentiment is towards Palantir.

From what I have gathered, operating cost is a concern and challenge, and the cost is not into R&D but rather SG&A, and Palantir strong financial health might be something investors can be rest assured.

What is important for Palantir is to show that they are capable to grow their commercial side of business and then we could see its stock price trading above $25.

Summary

I personally have a position in Palantir and will be holding onto it, as I see potential in this company. The SG&A operating expenses is something that could be overcome. As long as Palantir keep winning commercial projects, I believe there will be more value added.

I personally feel that Palantir is worth more than $25 considering the technology spectrum it bring to the AI revolution. Most of the other AI companies are not focus on data, which is a very important part of AI journey.

I am currently working on a price for credit health, uncleaned data have caused so much trouble to that company, a good AI data company should be able to help to collect, arrange and make data useful.

That is Palantir for you!

Appreciate if you could share your thoughts in the comment section whether you think Palantir would soar above $25?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.