Palantir stock rebounds strongly to huge volume after six day sell off

Text size

Palantir Technologies

The stocks broke their six-day losing streak with a sharp rebound on Friday. The still volatile stock had fallen more than 30% in six days, driven by disappointment with the company’s fourth-quarter financial results and the recent expiration of its post-IPO lock-in period for traders. investors.

The Wall Street Journal’s Heard on the Street column points out Friday that the action was crowd-adopted by Reddit WallStreetBets, the same group of individual investors that led

GameStop

parabolically higher stocks (ticker: GME) last month.

On Tuesday, Palantir (PLTR) reported revenue of $ 322 million for the December quarter, up 40% from a year ago and well ahead of Street’s consensus of 300.7 millions of dollars. The company reported non-GAAP earnings of six cents a share, ahead of the Street consensus of two cents. On a GAAP basis, the company lost eight cents per share. Palantir said government customer revenue was $ 190 million, up 85% from the previous year, while commercial revenue was $ 132 million, up just 4%

The big data analytics firm said it expects revenue growth of 45% for the first quarter. Palantir continues to expect revenue growth of over 30% for the full year and has announced a new revenue target above $ 4 billion for 2025.

Street reaction to the results has been mixed. As reported on Wednesday, the stock was improved after the results of

Goldman Sachs

buy from Neutral, with a new price target of $ 34, while William Blair went to Market Perform’s Underperform, saying the stock is not valuing risk enough. Citigroup analyst Tyler Radke reiterated his sell score and target of $ 15, saying “the stock is overvalued considering shrinking growth engines and increasing quality issues with higher exposure to government.

Credit Suisse analyst Brad Zelnick repeated his underperformance rating this week, setting a price target of $ 20. He wrote in a research note that the fact that the company exceeded estimates for the quarter but failed to boost the 2021 forecast “leaves lingering questions about the potential extent of the growth deceleration in the second half of the year. “. And he adds that the lack of a full-year margin forecast “calls into question the sustainability of the recent margin expansion as the Covid-related savings return. [like many IT services companies, the company reduced travel spending during the pandemic] and the company invests heavily in direct sales. “

Trading activity in this security soared this week before the lock-up expired on Thursday. Nearly 308 million shares were traded on Thursday, the highest total on record outside of the share’s listing date of September 30, when 339 million shares changed hands. Friday will be the fourth day in a row with trades of at least 149 million shares.

Palantir shares were opened for trading last year at $ 10. The stock over the past few weeks has been very volatile, trading as high as $ 45 on an intraday basis on January 27. After closing at $ 38.17 on February 9, the stock entered a six-day drop ahead of today’s rally. Shares of Palantir rose about 13% on Friday to $ 28.37. At this level, the company has a valuation of around $ 53.5 billion, roughly 36 times Street’s revenue forecast for 2021.

Write to Eric J. Savitz at [email protected]