- Palantir Technologies (PLTR) is expanding its presence in the U.K. market.
- All indicators point to the continued need for Palantir’s services.
- PLTR stock is trading at a nearly 34% discount according to analysts’ estimates.
Being greedy when others are fearful is a popular saying in the stock market. It is a framework for identifying and taking advantage of opportunities in the market. It is with this mindset that I examine Palantir (NASDAQ:PLTR) and PLTR stock.
Trading growth stocks is a perilous undertaking right now. We saw Teladoc Health (NASDAQ:TDOC) and Netflix (NASDAQ:NFLX) fall by more than 30% in a single day. So, it is hard to say that Palantir could not suffer a similar fate despite being down more than 64% from its 2021 highs of around $29.
Despite the risk, the massive opportunity in the data analytics space still remains. PLTR stock could be a good choice for investors willing to take the risk.
|PLTR||Palantir Technologies Inc.||$10.68|
Palantir Gets an Upgrade
Despite the drop in PLTR stock, the company is still thriving as it provides an invaluable service. It is said that in the 21st century, data is the new oil. If this is true, you can consider Palantir as one of the best refiners out there. The long-term trend for needing better data processing remains.
Governments are increasingly seeing the need to manage and protect the data that they have. The world is becoming more hostile and this is now a strategic need, as well. Investment bank RBC upgraded the data analytics company because of these tailwinds. RBC raised the rating of PLTR stock to “sector perform” from “underperform” and increased the price target to $12 from $9. In a note, analyst Rishi Jaluria commented, “We believe as the war drags on, governments around the world are increasing their defense spending (including against cyber-attacks) and we expect Palantir to be a beneficiary of this trend.”
According to TipRanks, PLTR stock has an average analyst price target of $14.31. This is based on the estimates of nine analysts. These forecasts have a high of $20 and a low of $10.
Palantir Continues its U.K. Expansion
Palantir continues the expansion of its government business beyond the U.S. border. The company has recently hired the former head of artificial intelligence (AI) for Britain’s National Health Services (NHS). Indra Joshi should be a tremendous asset for the company as it competes for a contract to manage datasets for the NHS.
This contract could potentially be worth $313 million, more than 10x its previous contract with the NHS. Palantir has worked with the NHS in the past when it ran the NHS Covid-19 Data Store. While there has been some controversy in past, the value that Palantir brings to the table in terms of data and efficiency cannot be overlooked.
This hire could be instrumental in growing Palantir’s business in the U.K. As an integral part of NHS, Joshi was instrumental in driving deals with tech firms. Currently, Palantir has about 600 employees in the U.K. The company is working on contracts for the NHS, the Ministry of Defense and the Cabinet Office. The U.K. market could potentially be a major revenue source for the company.
Your Takeaway on PLTR Stock
The once high-flying PLTR stock is now trading at a huge discount. The average Wall Street price target implies a 33.9% upside from current price levels. I can’t tell you what will happen in the short-term. Market conditions have made forecasting extremely difficult in recent weeks.
However, all indicators point to the continued need for Palantir’s services. This should bode well for PLTR stock.
On the date of publication, Joseph Nograles held a long position in PLTR, NFLX stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.