Palantir Technologies (NYSE:PLTR) stock hasn’t had a good ride lately.
Despite reporting strong financials and bagging top contracts, the company has not been able to satisfy investors.
PLTR stock has dropped like a rock in the past two months but it is worth so much more than the $19 it’s trading for today.
In the third quarter, the company saw a 103% rise in revenue which led to total revenue of $392 million. Despite the solid numbers, the stock remains unloved.
Palantir has been controversial for its work with the Department of Defence and the U.S. Army which means the company is a top holder of the government data. On the other hand, that also shows that Palantir is here to stay and it will continue to serve the government customers.
When I wrote about PLTR stock in November it was trading at $22. I believe the stock is undervalued and could experience a breakout soon. This dip is a good opportunity to own the stock.
Strong Partnerships to Boost the Business
Palantir recently announced that the U.S. Army has exercised the second-year option of the partnership and will continue using Palantir’s software.
This contract is worth $116.3 million. It also bagged another $43 million contract from the Space System common.
Further, the company signed an agreement with Kinder Morgan, a large energy infrastructure company in North America to deploy Palantir’s software, Foundry, to drive operations.
Winning government contracts is not easy and Palantir seems to have become a favorite of the government. The momentum that these contracts bring cannot be overlooked and the revenue from them is certainly huge.
It reflects the long-term strength of the company and shows that it has established itself well in the government sector. The company recently inked a partnership with Merck to handle the computer chip shortage problem. Further, it announced a partnership with BigBear where the company will use its Foundry platform to offer services.
Another multi-year partnership with Dewpoint Therapeutics has also got the shareholders excited. DewPoint will use the Foundry platform for its operations. Financial details about these partnerships have not been disclosed.
Palantir is making strong partnerships in a short period of time and this is proof that its products are working and are successful.
It also shows that the products are not limited to the government sector and meet the needs of commercial industries too. I believe these partnerships will have a strong effect on the bottom line and will push PLTR stock higher.
The Bottom Line on PLTR Stock
The fundamentals are strong and the contracts are steadily growing. All looks well on Palantir’s front, so why is PLTR stock not moving? It has been stuck in the range of $20s and $30s for the past few months.
This could be a result of the overall investor sentiment or the concerns related to government contracts. However, PLTR stock is not one to ignore.
It may not soar to new highs instantly but it does have the potential to grow slowly and steadily. The recent partnerships and new contracts make a solid case for PLTR stock and it will reflect in the financials.
One thing is certain: the government has faith in Palantir’s products and it has become an integral part of the U.S. Army. Not every company has the potential to achieve this.
PLTR stock will move upwards but it may take time and those who hold the stock for the long term will benefit.
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.
