Is this software stock a buy on its downtrend?

Software company Palantir Technologies (PLTR) has lost almost 50% in the last one year. However, the stock has posted gains in the past one month due to recent developments. But will it be able to maintain its advantage? let’s find out….


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Palantir Technologies Inc. ,PLTR) builds and deploys software platforms for the intelligence community to assist with counter-terrorism investigations and operations in the United States. The company’s software portfolio includes Palantir Gotham, Palantir Foundry and Apollo.

On July 28, 2022, PLTR announced that it would expand its work with the US Army Research Laboratory to implement data and artificial intelligence/machine learning capabilities for users of combat commands.

In addition, on June 28, 2022, Guidehouse, a global provider of consulting services, announced its partnership with PLTR. However, it may take some time for these ventures to generate substantial profits.

Over the past month, the PLTR has gained 20.8% to close the previous trading session at $11.20. However, it has declined by 38.5% year-on-year and 49.6% as compared to the previous year. It is currently trading up 73.9% from its 52-week low of $6.44, which was hit on May 12, 2022.

Here’s what could shape PLTR’s performance in the near future:

mixed financial

For the first quarter ended March 31, 2022, PLTR revenue grew 30.8% year-over-year to $446.36 million. However, its cash, cash equivalents and restricted cash came in at $2.33 billion, down 4.7% year-over-year.

In addition, its adjusted operating margin came in at 26% compared to 34% in the year-ago period. In addition, its adjusted free cash flow came in at $29.79 million, down 80.3% year-over-year. In addition, its adjusted EPS was down 50% year-over-year at $0.02.

stretched valuation

In further context EV/sThe PLTR of 10.45x is 253.2% higher than the industry average of 2.96x. Its forward EV/EBITDA of 37.81x is 186% higher than the industry average of 13.22x. In addition, its forward P/S of 11.58x is 288.7% higher than the industry average of 2.98x.

poor profit margin

PLTR has a negative 12-month EBITDA margin of 19.46%, which is significantly lower than the industry average of 12.82%. Furthermore, it has a negative net income margin of 30.25% in the past-12 months, which is less than the industry average of 4.37%.

In addition, PLTR’s previous-12-month ROCE, ROTC, and ROTA of negative 23.89%, 8.60%, and 15.01% compare with industry averages of 6.88%, 4.16%, and 2.65%, respectively.

Power ratings reflect bleak prospects

PLTR has an overall rating of D, which is equivalent to Sell owned by us power rating Arrangement The POWR rating is calculated by considering 118 different factors, each factor weighted to an optimum degree.

The PLTR has a value grade of F, which corresponds to its higher-than-industry valuation multiples. The stock has a D grade for stability, with its 24-month beta in sync with 1.99.

24-in stock Software – SaaS Industry, PLTR is ranked #19. The industry has been rated F.

Click Here For additional power ratings for PLTR (growth, speed, sentiment and quality).

See All the Top Stocks in Software – SaaS Industry Here,

ground level

PLTR’s recent business expansion policies have helped the company register positive returns in the last one month. However, it has lost nearly 50% over the past year, and its poor profitability is worrying. Thus, I think it is best to avoid PLTR for now.

How does Palantir Technologies Inc (PLTR) stack up against its peers?

While PLTR has an overall PoWR rating of D, one might consider looking at its industry peer, Informatica Inc. ,infa), The Sage Group Plc (SGPYY), and Mix Telematics Ltd. (Mix), which has an overall B (Buy) rating.


Shares of PLTR were trading at $11.25 per share on Thursday morning, up $0.05 (+0.45%). Year-on-year, the PLTR declined -38.22%, while the benchmark S&P 500 index gained -12.11% during the same period.


About the Author: Riddhima Chakraborty

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Riddhima is a financial journalist who has a passion for analyzing financial instruments. with Master’s Degree in EconomicsShe helps investors make informed investment decisions through her insightful comments.

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