Palantir Technologies (NYSE:PLTR) stock is a growth play that is stuck despite reporting solid revenues.
The company is known for secrecy as it deals with government data but there is so much more to it than that. PLTR stock is worth it for patient investors.
It could be frustrating for investors to keep holding on to it but this is a stock that slowly moves upwards. PLTR stock does not make a sharp rise or dip, it is always moving steadily.
The stock hasn’t been able to cross $30 in the past six months. It is currently exchanging hands at a little below $23 having dipped after the third-quarter earnings. The company has solid financials and did $1.1 billion in business in 2020. This number is only going to increase this year. With that in mind, let’s take a look at two catalysts that will drive PLTR stock upwards.
A Closer Look at PLTR Stock
Investors are concerned about the fundamentals of a company and Palantir proves its worth there.
It recently reported the third-quarter results and the revenue stood at $392 million with an EPS of 4 cents. The revenue has grown 36% year over year and the company has a solid outlook for the fourth quarter.
In the second-quarter results, the company reported a 90% year-over-year growth and a rise in customers by 32% in the quarter. It had positive cash flow and a loss of 7 cents.
Palantir expects the fourth-quarter revenue to hit $418 million and the full-year revenue to come in at $1.52 million, which is a significant rise from 2020. It added 34 new customers in the quarter.
The company expects annual revenue growth of 30% through 2025. Considering the growth of the company, it looks certainly possible.
Palantir is a favorite of the U.S. government and often closes federal contracts. The company must be delivering something that makes its products so popular for the government.
Some of its prominent clients include the Department of Defense. The company is often criticized for solely focusing on government clients, but it has sought to diversify. PLTR has successfully added several commercial businesses to its customer base.
In the third quarter, commercial revenue increased 103% year over year and the customer count increased by 46%. It reported government revenue of $218 million.
Palantir has successfully closed 33 deals aggregating more than $5 million and 18 deals valued at $10 million. As long as the company continues closing deals, it will generate revenue and cash flow.
There was a time when investors were worried about Palantir’s dependency on government clients but it is no longer the case. The commercial revenue of the company has gone from 4% in Q4 2020 to 37% in Q3 2021.
Further, it reported cash flow from operations at $240 million. The numbers prove the strength and stability of Palantir in the industry.
The Bottom Line on PLTR Stock
All in all, Palantir is a solid company and if you are buying the stock, forget about the government customers, founders or the secrecy associated with it. Remain patient and watch the company take solid strides in the industry.
It has enormous potential and an ability to meet the requirements of government and commercial customers. Palantir is preferred by government agencies for a reason and the company is offering precisely what its customers seek.
It has the ability to bring about a revolution for businesses and the way Palantir is closing high-value deals, shows that the company is doing something right. Palantir’s demand in defence and healthcare is exploding.
PLTR stock may not see a massive high anytime soon but it will continue to grow. The company has raised full-year guidance and it will only do so when it has the confidence of achieving the numbers.
Palantir has a solid customer base and a product that works. PLTR stock is the one to own for the long term and any dip is a chance to buy.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long-term gains. Her knowledge of words and numbers helps her write clear stock analysis.