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A banner featuring the Palantir Technologies (PLTR) logo is seen on the New York Stock Exchange (NYSE) on the day of their initial public offering (IPO) in Manhattan, New York City, the United States, September 30, 2020.
Andrew Kelly | Reuters
Palantir shares slipped more than 14% on Wednesday after Morgan Stanley downgraded the stock to evenly underweight.
The company said the company was trading at a “significant premium” to its peers, with its stock more than doubling since its IPO on September 30.
“With a PLTR up 155% since listing with very little change in fundamental history, the risk / reward paradigm is shifting decidedly negatively for stocks,” Morgan Stanley analysts wrote.
Co-founded in 2003 by tech investors Peter Thiel and Joe Lonsdale, CEO Alex Karp and others, Palantir provides data analysis software and services to government agencies including the Department of Defense, Food and Drug Administration and the intelligence community. It also sells to companies like aircraft manufacturer Airbus and energy producer BP.
The company announced its first earnings announcement since going public last month. The company said its new contracts in the third quarter included a $ 91 million deal with the military, a $ 36 million contract with the National Institutes of Health and a $ 300 million renewal with a client of the aerospace.
“While strong 3Q20 results underscore sustained momentum in the vertical public sector, accelerating company growth and record margins of + 25% represented a slight fundamental increase from initial expectations – we believe that much of the gradual move since 3Q20 results over the past 2.5 weeks) is likely related to factors outside of fundamentals, including a strong long-term retail interest that squeezes a strong interest short-term institutional, ”Morgan Stanley analysts wrote.
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