Palantir Stock Hits MAX Fear | Buy Now!

Palantir stock is taking a beating and even Cathie Wood of ARK Invest is selling…so why am I buying? Full Palantir stock analysis and why NOW is the time to buy! Get the Weekly Bow Tie, our FREE market newsletter with news, strategies and trends you need to know! https://mystockmarketbasics.com/dailybowtie

In this video, I’ll show you why I think Palantir stock has reached that level of max fear that could signal a bottom in the stock price. We’ll look at the company’s growth, why the shares have fallen 25% since earnings and price forecasts for the stock.

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The big news yesterday was a giant selling of Palantir by Cathie Wood and ARK Invest. Wood has been one of the biggest and most public champions for Palantir, and shortly after the stock issued shares had a price target of $34 each to value the company at $65 billion.

Until about a week ago that is and they sold a massive block of shares yesterday. The flagship fund, the ARK Innovation ETF, ticker ARKK, sold 9.4 million shares or more than 89% of its remaining holdings in Palantir.

This signals the point of max fear for Palantir. When even the most die-hard cheerleaders of a stock give up and sell their shares, you’ve got to wonder if there’s any sellers left. That’s going to place a floor of support under the share price and give it time to prove those long-term fundamentals.

And growth is there. The company claims its Foundry is to app developers what Amazon Web Services was in the last decade. On this growth, management has a target of 30% revenue growth through 2025 which would take the company from $1.5 billion in sales last year to $4.4 billion. Analysts believe Palantir can meet that growth target at least through 2023 for an estimate of $2.6 billion in sales.

On the valuation side, even after the massive crash, shares of Palantir are more expensive than I usually like to pay for a stock. The price-to-sales ratio has come down to 13-times trailing revenue from as high as 40-times last year, so that’s a huge discount but I usually like to see even my fast-growing stocks down below 10-times on a price-to-sales before buying.

Part of this is that 80% gross margin management is able to squeeze out of sales and the operating margin around 30-percent. All this means that as that revenue grows by management’s 30% annual target, you’re going to start seeing profits pile up and justify a little higher valuation for the stock.

As for analyst price targets for Palantir, we have eight analysts with an average target of $13 per share or about 25% higher than the current price. Now a lot of these have come down though as analysts slash their forecasts on recent weakness but we still have some very strong targets like $21 a share from Brent Thill at Jefferies and $24 per share at Morgan Stanley. On management’s target of $4.4 billion in 2025 sales and a modest 10-times price-to-sales valuation, this could easily be a $22 stock which would be a return of over 100% in the next three years and just keep running from there.

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Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps.

Видео Palantir Stock Hits MAX Fear | Buy Now! канала Let's Talk Money! with Joseph Hogue, CFA