Palantir Technologies slips even as BofA defends, says sell-off is … – Seeking Alpha
Michael Vi/iStock Editorial via Getty Images
Michael Vi/iStock Editorial via Getty Images
Palantir Technologies (NYSE:PLTR) shares fell fractionally in premarket trading on Thursday even as investment firm Bank of America defended the Alex Karp-led company, stating that this week’s sell-off was “overdone.”
Analyst Mariana Perez Mora, who has a buy rating and a $14 price target on Palantir (PLTR), noted that shares have declined 8.5% so far this week as investors are increasingly concerned about software infrastructure spending heading into a potential recession, the company’s strategy for investing in special purpose acquisition companies and recent downgrades.
“In our view, Palantir’s SPAC investments strategy seemed to be poorly timed and has not achieved its investment objectives thus far,” Perez Mora wrote in a note to clients, adding that the company has already recognized $334M in related losses and may see another $14M hit in the fourth-quarter, given the current stock market environment.
However, Perez Mora added that this strategy is indicative of Palantir’s (PLTR) “aggressive” approach to sales and is likely to see another strong year for revenue growth.
“We expect Palantir to repeat another year of strong sales, as continued supply chain disruption and an increasingly expected recession calls for further operations optimization and data management,” the analyst posited. “However, as corporate software budgets struggle, we expect Palantir to pursue that growth with lower pricing and margins (especially considering its current $2.4bn in net cash).”
Perez Mora also noted that at a share price of $6, investors get Palantir’s (PLTR) commercial business for “free” and its government exposure is worth $7 per share by itself.
Earlier this week, Palantir Technologies’ (PLTR) U.K. division reached a £75M enterprise agreement with the UK Ministry of Defense to support the latter’s digital transformation.