December 2, 2021

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Palantir Stock Looks Good On the Balance Sheet And the Technical Chart

A name synonymous with clandestine ops is finally revealing earnings. But when it comes to today’s Palantir Technologies (NYSE:PLTR), can investors expect disclosure to yield a win in PLTR stock?

Source: Ascannio / Shutterstock.com

Since going public just over a year ago shares are up nearly 160%, while easily trumping the large-cap, tech-heavy Nasdaq Composite and its gains of around 45%. Yet despite the more than three-fold beat, it hasn’t been a one-way street controlled by bulls by any stretch.

PLTR stock has been all over the map, alternately satisfying both bulls and bears in an environment where higher-multiple growth stories like Palantir’s have come under pressure for a significant part of 2021.

At its best, gains neared 350% from last September’s $10 NYSE debut to February’s all-time-high. Yet that strength was immediately followed by a fierce multiple contraction, with shares surrendering more than 60% into early May, flying in the face of the more benevolent and commonplace bullish attitude toward Palantir.

Speaking of which, if history is any indicator, Tuesday should see another outsized stock reaction as hinted by four straight quarters of larger stock losses and gains in the immediate aftermath of earnings releases from Palantir.

In front of the report, PLTR anticipated sales growth, with its commercial and government businesses expanding at 30%-plus levels through 2025.

Nearer to the action and maybe allowing some investors to breathe more easily, healthy operating margins (which have consistently topped 30% the past three quarters) also helped Palantir deliver its first quarterly profit of four cents a share, matching analyst expectations.

But the real story will remain sales growth and clarity on that rather broad and often tricky front. Palantir outperformed its Q3 guidance of $385 million in revenues, with revenue of $392 milion growing 36% compared to the year-ago quarter.

That’s a solid build in revenues to be sure. Problematically though, the number also equates to a fairly tepid 4% sequential increase from PLTR’s second quarter. Maybe worse, is the associated perception as it would mark Palantir Technologies’ slowest growth as a public company.

That being said, PLTR notched a solid beat, and offered Q4 guidance of $418 million, compared with analyst estimates of $402 million.

One Seeking Alpha contributor with a lot to say on Palantir suggested a guidance raise north of three points to 27% YoY growth would be required to attract more investors. While Q4 guidance came in at nearly 30% YoY growth, PLTR stock has declined 9% so far today.

Smart investors will take that as an opportunity to buy Palantir stock on the dip. From a technical perspective, investors should already appreciate that the PLTS price chart indicates a more consistent bullish narrative for shares moving forward.

PLTR Stock Weekly Price Chart

Palantir Technologies (PLTR) up-channel reinforced by building cup base and stochastics crossover


Source: Charts by TradingView

All the zigs and zags in PLTR’s life as a publicly traded stock appear to be coming together in a much more reliably bullish way for investors.

On a technical chart, investors can see that today shares of Palantir are forming a solid-looking up-channel backed by stochastics and a building cup or saucer-shaped base.

Right now those three factors are conspiring to rally PLTR stock higher.

Observably, somewhere in the vicinity of $34 to $35 by year’s end looks approachable before channel and Fibonacci resistance might come into play. But that upbeat take on the Palantir price chart isn’t going to sit well with everyone.

Wall Street’s average price target sits about 8% below Monday’s close at $26.74. PLTR shares also maintain a non-buy recommendation, wedged between a hold and underperform, though that isn’t sufficient cause to worry.

When you consider Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX),Tesla (NASDAQ:TSLA) and other companies that maintained their share of critics during their most significant growth phases, PLTR stock is kinda sorta in good company.

Still and appreciative of numerous bad actors ranging from certain a certain metric, analyst calls, a chart failure or what was or wasn’t said always lurking in the shadows — a purchase in PLTR stock always looks more well-informed without government clearance using a collar strategy.

On the date of publication, Chris Tyler holds long (either directly or indirectly) positions in Palantir Technologies (PLTR) stock and its derivatives. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.

Palantir Stock Looks Good On the Balance Sheet And the Technical Chart