Hot stock Palantir Technologies (NASDAQ:) is down 8% in the after-hours after reporting earnings results.
Sales beat estimates on accelerating growth. The 4th highest quarterly sales growth rate since the company went public.
EPS came in line with expectations.
What is the outlook from here?
The market is expecting about 30% earnings growth and 27% sales growth.
Based on the current stock price, Palantir has a PE of 195x and a price to sales of 74x.
Why is the stock down?
Who knows. You can spin the narrative to match whatever the stock price is doing. For all we know, the stock could be up 8% by tomorrow AM.
A lot is made of the valuation. A 195x PE isn’t typically what you want to look for.
But earnings are growing 30 %+, so if you look at it from a price to earnings growth (PEG) perspective, the stock is trading about 7x its EPS growth rate. Which is actually better than many of the Ma-7 stocks.
For me, the price-to-sales of 74x is what concerns me. Sure, if the company keeps reporting accelerating sales growth, you’ll probably be fine. But if they ever have a slip-up, there is a lot of downside risk, in my opinion.
!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;n.queue=[];t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)[0];s.parentNode.insertBefore(t,s)}(window, document,’script’,’https://connect.facebook.net/en_US/fbevents.js’);
Source link
