Palantir stock is in a strong bull run and is slowly nearing its all-time high as the momentum that started in July gains steam. PLTR jumped to $191, its highest level since December 29, and 80% above its lowest level in July. This rally may continue, helped by its strong technicals and fundamentals.
Palantir stock rallies as its growth gains momentum
PLTR has jumped in the past few months, a move that has coincided with the ongoing rebound of software companies. It has also jumped because of its strong revenue growth, driven by the ongoing demand from government and companies.
Its last financial results showed that its revenue jumped by 93% in the second quarter to $1.93 billion. Its US commercial revenue soared by 149%, while the government figure soared by 90%.
The company closed 220 deals worth at least $1 million a year, and 73 deals worth at least $10 million. This growth demonstrates that there is still demand for its software as companies seek to gain an edge.
Palantir Technology’s profits also continued growing, with its net income surging to $1.06 billion, representing a 55% margin. Also, the adjusted free cash flow rose to $1.22 billion, equivalent to 63%.
Analysts believe that Palantir’s business has more room for growth this year. The average estimate is that this quarter’s revenue will come in at $2.18 billion, up by 84% from a year earlier. For the year, Yahoo Finance data shows that analysts see the revenue soaring by 83% to $8.19 billion, followed by $12.2 billion next year.
Palantir’s real revenues will likely be higher than these estimates. That’s because it has constantly outperformed analysts estimates since going public a few years ago. As such, chances are that the real revenue will jump to $15 billion next year.
READ MORE: Palantir stock is stuck in a bear market: Here’s why it may rebound soon
Wall Street analysts are bullish on PLTR stock despite valuation concerns
Top Wall Street analysts are highly bullish on Palantir stock despite the stretched valuation. Kyro data shows that 18 analysts have a buy rating on the stock, while 10 have a hold. Only two analysts have a sell rating.
Rosenblatt’s John McPeake has a buy rating with a target of $225, while UBS and DA Davidson believes it can jump to $250. Other analysts who are bullish on the company are from firms like Mizuho, Citigroup, and Cantor Fitzgerald.
A key justification for the company is its strong revenue growth and its valuation based on the Rule-of-40 multiples. By adding its forward revenue growth and its profit margins, the company has a Rule-of-40 multiple of over 130%.
Palantir stock price technical analysis
PLTR stock chart | Source: TradingView
The daily chart shows that the PLTR stock has rebounded in the past few months. This rebound started after it bottomed out at $107 in July. It has already crossed the important resistance level of $165, its highest level on $165. Moving and retesting that level confirmed the bullish outlook.
The stock has remained above the 50-day moving average, while top oscillators have continued rising. Therefore, the stock will likely continue rising as bulls target the key resistance level of $207, its highest level in November last year.
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