Is Palantir Stock a Buy?
Is Palantir a good investment? Is Palantir overvalued?
What does Palantir do?
Palantir is often considered a secretive company, and there is some truth to that. In the company’s history, Palantir has mainly served intelligence & military institutions, which of course required a high level of confidentiality. As a result, very little was known for a long time about the products, their uses, and the general business circumstances. Palantir was obliged to keep quiet about the exact business.
There was even misinformation in the public domain that Palantir was not allowed to correct. In the meantime, however, Palantir has grown considerably and attracted customers from various sectors of the normal economy. Accordingly, they can now at least communicate a little more openly about the technologies they offer and how they benefit the customer.
Unlike many other data technology companies, Palantir is not a data collector or seller, i.e. customer data is not collected, bundled or passed on, nor is the data used for self-serving purposes, such as training machine learning algorithms.
Palantir provides software and infrastructure to customers. The benefit to companies is that Palantir’s system assembles data to make the right decisions at the right time. This is extremely valuable, for example, when the company’s existing databases and systems do not communicate with each other. An examplary problem might be deciding how much of a particular product to produce. In order to make this decision in the best possible way, you need information about the duration and sequence of the production process, current inventory levels, current financial possibilities, and the purchasing behavior of customers. It is precisely this type of data that Palantir extracts from the system, analyzes, and utilizes to provide a basis for decision-making as comprehensively as possible.
Is Palantir Stock a Buy?
Palantir is a growth company. If you look at the price-to-sales ratio of 46, however, it is necessary to point out that this is a really large number. The road to profitability will still take a few years and even if you hold the business model in high regard, there are currently a few sectors that are a bit overvalued at the moment. The sector in which Palantir is positioned is currently in a rather hot stock market phase.
It should also be mentioned that Palantir already experienced a significant setback after the publication of the quarterly figures and that the valuation is still quite high despite this setback. Moreover, we could witness a cooling-off period expiring only a few days ago, which prohibited large investors from selling Palantir shares on the market. Therefore, in general more shares should be offered for sale now. Aside from that, should a stronger correction really occur, Palantir will possibly correct somewhat more strongly than shares such as Amazon or Microsoft.
Other interesting articles:
Palantir Is a Buy! Palantir Is a Sell! Why Wall Street Is Split.
Demystifying Palantir: The Most Controversial Company to Go Public in 2020
This article is for informational purposes only, it should not be considered a recommendation to buy, hold or sell a particular investment instrument.
