We have noted Palantir Technologies's positive performance during today's evening trading session, during which it logged a 3.0% outperformance of the S&P 500. At its current price of $8.81, the company is now trading in range of its average target price of $9.08, which calls into question its ability to keep moving higher. Analysts have given the Computer Retail stock target prices ranging from $5.0 to $15.0 dollars per share, with an average rating of hold.
To understand the market's outlook on the stock, we can look at Palantir Technologies's short interest: the proportion of the fshare float that is tied to short positions. Behind each short position is an investor who believes that the stock will decline in the future. Here, the stock's short interest is 7.3% which means the outlook is split.
Short selling involves borrowing shares and then selling them at current market prices. In the successful version of the strategy, the shares are purchased at a lower price at some time in the future. The investor then returns the shares to the lender, and keeps the profit made on the sell/buy transaction.
A possible indicator of market sentiment on a stock (besides its share price, of course) is the portion of institutional investors that make up its shareholders. Institutions such as banks, hedge funds, and wealth managers deploy significant resources towards identifying good investments. If they are invested heavily in a given company's stock, it could mean it's a good investment. Or it could mean the company is being targeted by a takeover attempt.
For what it's worth, institutions own 34.8% of Palantir Technologies's shares, which is an average amount. It means that many institutions are invested, but not to the extent that they would be in a stock such as Apple or Amazon, whose institutional ownership rates hover around 60%. Bear in mind that institutional ownership is just one piece of the puzzle in determining market sentiment, and you should not consider this factor alone in making an investment decision.
In conclusion, we see mixed market sentiment regarding Palantir Technologies because of an analyst consensus of some upside potential, a hold rating, an average amount of shares sold short, and only a small number of institutional investors. At Market Inference, we believe that any investment decision should be preceded by an in-depth analysis of the company's fundamental values and a comparison with similar stocks.
Here's a snapshot of some important facts to keep in mind about PLTR:
The stock has trailing 12 month earnings per share (EPS) of $-0.19
Palantir Technologies has a trailing 12 month Price to Earnings (P/E) ratio of -46.4 compared to the S&P 500 average of 15.97
The company has a Price to Book (P/B) ratio of 7.2 in contrast to the S&P 500's average ratio of 2.95
Palantir Technologies is a Technology company, and the sector average P/E and P/B ratios are 27.16 and 6.23 respectively