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Palantir stock rally 200% on data analytics demand, guides 30% growth for 2021

Palantir stock rally 200% on data analytics demand, guides 30% growth for 2021
Siraj
Sarwar
Updated: 12 Dec, 2020
2 mins read

Palantir stock (NYSE: PLTR) price has been stunning investors with massive gains since its debut on NYSE two months ago. The share price rally is backed by the tremendous demand for its data analytics software both from government and commercial customers.

The shares of a data analytics company that offers services to military, healthcare, and aerospace customers rose 200% in the past two months. The substantial investments from prominent hedge fund managers helped in enhancing investors’ confidence in future fundamentals.

Additionally, on October 26, 2020, the company announced it is developing a data-mining tool to assist the U.S. government in tracking the administration of COVID-19 vaccines. This is also a potential factor driving investors’ interest in PLTR stock.

PLTR Palantir Technologies Inc. daily Stock Chart
Palantir stock performance. Finviz chart

Financial growth and rosy outlook supports Palantir stock bull-run

The company anticipates more than 30% revenue growth for 2021 on top of more than 40% year over year increase in 2020 revenues.  

Steve Cohen’s Point72 hedge fund has initiated a position in a data analytics company during the September quarter. Anchorage Capital Group also purchased 2.95 million shares during the third quarter.    

Palantir offers two data analytic products including, Palantir Gotham and Palantir Foundry. Its third-quarter revenue of $290 million jumped 52% from the past year period.

The company’s backlog has also been strengthening quarter over quarter amid strong demand from commercial and government customers. It secured 15 contracts in the latest quarter that includes a $300 deal million with an aerospace customer and a $91 million contract with the U.S. Army. The data analytics company expects fiscal 2020 revenue in the range of $1.70 billion, up 44% from the previous year.

On the other hand, the company is aggressively working on expanding its footprints into international markets. The latest strategic partnership with Sompo Holdings, the Tokyo-based insurance company, is in line with the strategy of international expansion.

Alexander C. Karp, co-founder, and chief executive officer of Palantir Technologies Inc. said:

“Sompo’s work is vital to Japan’s welfare and security, and Kengo Sakurada, the company’s group chief executive officer, has been a critical and trusted partner as we work with Sompo to expand our reach in Asia.”

Although future fundaments look strong considering backlog and 2021 estimates, the market pundits have started showing concerns over lofty Palantir stock valuations. Morgan Stanley analyst Keith Weiss sees balanced risk/reward at current valuations. 

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Siraj Sarwar
Author

Siraj is a finance writer based in Saudi Arabia with a strong understanding of and passion for the stock market, cryptocurrency, economics, and finance. He has worked for international clients for many years on several projects related to the stock market, equity research, accounting, and finance. Siraj is a published financial analyst on some of the largest finance websites.