During today's afternoon trading session, Palantir Technologies took the market by storm, rocketing to $26.89 per share despite it now being above its mean target price of $23.27. This 11.6% movement implies there may not be much more room for upwards movement for the stock -- if its analysts are to be believed. They are giving the Software stock on average rating of hold, with target prices ranging from 9.0 to 35.0 dollars per share.
It seems the market sentiment regarding Palantir Technologies is mostly optimistic, since it has a short interest of only 4.1%. This is the percentage of the share float that is being shorted by investors who are hoping the stock's price will decrease in the future.
When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the 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 42.3% 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 belief that shares are overpriced, 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 $0.12
-
Palantir Technologies has a trailing 12 month Price to Earnings (P/E) ratio of 224.1 compared to the S&P 500 average of 28.21
-
The company has a Price to Book (P/B) ratio of 14.82 in contrast to the S&P 500's average ratio of 4.71
-
Palantir Technologies is a Technology company, and the sector average P/E and P/B ratios are 31.58 and 4.11 respectively
