Palantir plunges as valuation overhang remains a drag
The shares have now given up the entirety of the bounce that followed the company’s stellar quarterly results Monday.
Easy come, easy go.
Palantir shares dove Wednesday, completely erasing the remaining gains accrued after the company’s stellar quarterly numbers issued Monday.
At roughly midday, the stock is on its way to its worst daily showing since last May.
Not a ton of ironclad news to blame for the sell-off. The company has received a fairly hearty ovation for its Q4 performance from Wall Street analysts. HSBC even upgraded it from “hold” to “buy” yesterday.
But Palantir has also gotten a couple of price target cuts in recent days — Mizuho, UBS, and D.A. Davidson among them — mostly on valuation grounds.
Though Palantir is a remarkably fast-growing and increasingly profitable company, by most valuation metrics it is — arguably — insanely valued.
That means the really impressive results Karp and Co. are reporting lately have already been crystalized in the price of shares, which have risen a cool 1,500% over the last two years. (However, the stock is down more than 30% since it hit a record on November 3.)
For what it’s worth, some of Wednesday’s slump in the stock likely just reflects that Palantir is getting sucked into the same vortex as other companies with high retail shareholder bases on Wednesday, perhaps as a result of the downdraft in crypto that seems to be injecting a bit of fear into the market.
