Palantir Technologies (NYSE: PLTR) remains a popular choice among investors, despite ongoing concerns regarding its valuation, and the upcoming earnings report may shed light on the stock’s future performance.
Recently, PLTR achieved a peak of over $45, continuing a robust rally that has seen its stock surge 152% year-to-date. At the time of writing, it was trading at $41.92, comfortably above the critical $40 support threshold.
However, Palantir’s rapid expansion has sparked worries that the company may be factoring in ambitious growth expectations. Analysts caution that if these forecasts fall short, the stock could experience a significant downturn.
What to anticipate from Palantir’s earnings report
Palantir’s earnings report due on November 5 could set the stage for future investor sentiment. For the quarter ending September 2024, analysts project a revenue increase of 26.1% year-over-year, bringing total earnings to approximately $703.7 million, with adjusted earnings expected to hit $0.09 per share.
Market strategist Roy Mattox highlighted in a November 3 X post that this forthcoming earnings report is pivotal.
Mattox noted that the implied volatility of 11% for PLTR indicates a wide potential trading range, with the stock possibly moving as high as $49 or dropping to $35, heavily influenced by the earnings call’s tone and the company’s outlook.
The strategist also reported that some investors have preemptively taken gains, securing a 35% profit ahead of the earnings announcement. Conversely, if the earnings call yields strong outcomes, there are intentions to aggressively expand long positions.
Conversely, should the report underperform expectations, further sell-offs could occur, although a favorable result might elevate price targets to as much as $100 in a subsequent upturn.
Mattox also pointed out that Palantir’s status as a potential leader in artificial intelligence is under examination. Although the company has the opportunity to establish itself as a primary “pure play” in AI, it must replicate Nvidia’s ability to reliably deliver impressive results.
Anticipating PLTR stock performance
As the stock is expected to react to the earnings announcement, investment advisor Michael Vodicka remarked in an X post that momentum indicators, like the relative strength index (RSI), suggest potential growth ahead.
Vodicka observed that the RSI has reached its most oversold position in the last six months. Historically, such dips in RSI have preceded significant stock rallies.
Overall, PLTR continues to exhibit bullish trends. Its business fundamentals appear robust, and its recent inclusion in the S&P 500 index further enhances investor sentiment. The firm’s advancements in AI have significantly increased its visibility.
Despite the generally positive outlook among investors, analysts hold differing opinions on PLTR’s future. With the stock trading above $40, analyst Jake Ruth deems it “very expensive.”
While anticipating solid earnings, Mizuho’s Greg Moskowitz maintains a “sell” stance. In contrast, Mariana Perez of Bank of America (NYSE: BAC) has set a target price of $50 with a “Buy” recommendation.
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