Palantir ETF Skyrockets on Strong Earnings Results
PTIR shares surged after the data analytics company reported stellar fourth-quarter results.
Shares of Palantir Technologies Inc. (PLTR) skyrocketed Tuesday after reporting strong earnings results for the fourth quarter.
The stock was up by 22% midday, fueling a 44% gain in the GraniteShares 2x Long PLTR Daily ETF (PTIR). After Tuesday’s gain, the fund is approaching $500 million in assets under management.
Palantir released stronger-than-expected numbers for fourth-quarter sales and profits late Monday. Revenue grew 36% year over year to $828 million during the fourth quarter, topping the consensus analyst estimate of $776 million.
At the same time, adjusted earnings per share came in at $0.14, ahead of the $0.11 that was expected.
“Our business results continue to astound, demonstrating our deepening position at the center of the AI revolution. Our early insights surrounding the commoditization of large language models have evolved from theory to fact,” said Alexander C. Karp, co-founder and CEO of Palantir.
Palantir May Be a Controversial Stock
Palantir is a popular stock among retail investors. Over the years, it’s gained a reputation for developing powerful analytics software that helps governments track down criminals and terrorists. The company has since widened its customer base to corporations in a push to fuel more growth.
However, despite the company’s strong performance, Palantir is one of the more controversial stocks on the market.
Shares trade at 61 times forward sales and 186 times forward earnings, an astronomical valuation due in part to the enthusiasm for the stock among retail investors.
Much like Tesla Inc., Palantir has cultivated die-hard base of individual investors who are extremely bullish on the company and committed to holding the stock through thick and thin.
Traditional financial metrics don’t seem to matter as much to the company’s investor base.
That stands in contrast to the Wall Street analysts who cover the stock. The stock only has four Buy ratings out of the 24 analysts covering it, according to Bloomberg. The average 12-month price target is $83, well below the current share price of $103.
Palantir trades at "a $100 billion-plus premium to peers with similar fundamentals,” said analysts at William Blair, who have an Underperform rating on the stock.
The company currently has a market value of $234 billion.
