Palantir (NYSE:PLTR) stock has fallen in July by about 15% month-to-date, despite being in the green today. But like a few other stocks taking some hits, PLTR stock is presenting investors with a short-term purchasing opportunity.
Palantir is the most technologically advanced data analytics platform provider in the world. And that alone sets them apart as top tog in an industry set for enormous growth.
But the business has also been on fire lately, and over the past six weeks alone, Palantir has accomplished a lot.
It expanded its Space Force partnership with a new $33 million contract, won a $7.4 million contract renewal with the CDC, won FAA approval for its new data analytics tool, teamed up with DataRobot to create an AI demand modeling platform and it also extended its Grupo Global partnership.
Like we said, that’s a lot for six weeks. And it underscores Palantir’s dominant performance in the data analytics space at a time when businesses and organizations of all shapes and sizes are looking to adopt data-driven decision making.
The Bottom Line on PLTR Stock
Management’s guide for annual revenue growth of 30% or greater into 2025 is very doable at this rate.
If this turns out to be the case, the valuation argument against PLTR stock falls to the wayside.
2021 revenues are expected at $1.5 billion. So, a 30% compound annual growth rate (CAGR) on that into 2025 puts 2025 revenues at $4.3 billion.
The average application software stock trade at around 11X sales.
Palantir is a superior application software company. And they deserve a premium multiple. A 15X multiple is perfectly reasonable. On $4.3 billion in sales, that nets you a $65 billion market cap — about 50% higher than where the stock currently trades.
And that’s with conservative modeling of 30% sales CAGR.
Net net, PLTR stock is a long-term winner worth buying on the dip.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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