Palantir Technologies Inc
Palantir Technologies Inc. (NYSE: PLTR) is engaged in building software to assist in counterterrorism investigations and operations. The Company’s three principal software platforms include Palantir Gotham (Gotham), Palantir Foundry (Foundry), and Palantir Apollo (Apollo).
Recent Financial and Business Updates:
- Q2 2023 witnessed remarkable achievements and growth for the company: In terms of financial performance, the company achieved an impressive GAAP net income of USD 28 million, marking the third consecutive quarter of GAAP profitability. This was accompanied by a GAAP income from operations of USD 10 million, reflecting a 2% margin, thereby showcasing the second consecutive quarter of GAAP operating profitability. Additionally, the company registered a GAAP earnings per share of USD 0.01 and an adjusted EPS of USD 0.05.
- Furthermore, the company demonstrated robust revenue growth, with a significant 13% year-over-year increase, culminating in a total revenue of USD 533 million. Within this growth, the company's commercial revenue stood out with a commendable 10% year-over-year expansion, reaching USD 232 million. Particularly noteworthy was the remarkable 20% year-over-year surge in US commercial revenue, reaching USD 103 million. Equally impressive was the 15% year-over-year growth in government revenue, amounting to USD 302 million, with a concurrent surge of 31% in international government revenue, totaling USD 76 million.
- The company's customer base also experienced remarkable growth, as evidenced by an impressive 38% year-over-year and 8% quarter-over-quarter increase in customer count. This trend was further accentuated by the exceptional growth in US commercial customer count, which surged by 35% from Q2 2022 to Q2 2023, reaching an impressive count of 161 customers.
- The financial robustness of the company was further evident in its operational achievements. The company delivered an adjusted income from operations of USD 135 million, reflecting a strong margin of 25%. Additionally, the company's efficient cash management was reflected in the generation of USD 90 million in cash from operations, demonstrating a solid 17% margin. The impressive financial management extended to the realm of free cash flow, with an attained adjusted free cash flow of USD 96 million, signifying a favorable 18% margin. Importantly, the company maintained a robust liquidity position, holding USD 3.1 billion in cash, cash equivalents, and short-term U.S. treasury securities.
- The positive trajectory extended into H1 2023, with a continued focus on financial success: The company achieved a total revenue of USD 1.1 billion, signaling strong financial performance. This was complemented by a GAAP net income of USD 45 million, corresponding to a notable 4% margin. Additionally, the company's GAAP income from operations reached USD 14 million, reflective of a 1% margin. The company's prowess in financial management was underscored by an impressive, adjusted income from operations of USD 260 million, accompanied by a robust margin of 25%. Cash management remained efficient, with the generation of USD 278 million in cash from operations, signifying a substantial 26% margin. The company's ability to generate favorable financial outcomes extended to adjusted free cash flow, with an attainment of USD 285 million, demonstrating a strong 27% margin. This sustained focus on sound financial management and growth trends bodes well for the company's prospects.
Technical Observation (on the daily chart)
Currently, the stock is near an important zone of USD 13.00-USD 25.00, from where price has taken resistances and supports in the past, if broken below can lead to further corrections to levels of USD 12-USD 12.50. The RSI (14 period) momentum indicator is at a value of 49.07, with expectations of some consolidation. Moreover, the price is currently positioned below both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term resistance levels.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Palantir Technologies Inc. (NYSE: PLTR) at the current market price of USD 15.49 as of August 29, 2023, at 08:40 am PDT.
Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
How to Read the Charts?
The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.
The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.
The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.
The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
The reference date for all price data, currency, technical indicators, support, and resistance levels is August 29, 2023. The reference data in this report has been partly sourced from REFINITIV.
Abbreviations
CMP: Current Market Price
SMA: Simple Moving Average
RSI: Relative Strength Index
USD: United States dollar
Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.
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