Palantir (PLTR) Earnings Preview
Palantir (PLTR) will report earnings on 8/12 before the open with the Street consensus at $0.03 EPS and $353M in Revenues (+40% Y/Y) with Q3/FY21 seen at $0.03/$376.4M and $0.14/$1.48B. PLTR shares have closed higher two of its three reports with an average max move of 11.5%. PLTR designs software platforms for defense/intelligence with its two principal platforms being Gotham and Foundry. It also has invested heavily in Apollo, a continuous delivery and product infrastructure platform that delivers updates. Gotham was its first platform and is for government operatives in the defense and intelligence sectors. Foundry was its expansionary move to commercial sectors. PLTR has a market cap of $42.25B and trades 26X EV/Sales and 102X EBITDA with revenues seen rising 35% in 2021 and 29% in 2022. Looking out to FY25 PLTR still trades 32X EBITDA forecasts and 12.5X Sales. Analysts have an average target of $23 with short interest at 4.7% of the float. Citi with a note last week on how PLTR is doing some shady business with commercial contracts with small SPAC companies and questionable incentives. MSCO reiterated an Underweight rating in May as durable growth is already more than priced into shares. Goldman upgraded to Buy in February with a $34 target encouraged by management’s target of $4B in revenues for FY25 and a growing backlog of deal value ($3B) seeing the commercial business improving. Hedge Fund ownership fell more than 20% in the latest quarterly filings, Ark a buyer as a top 20 position and Duquesne Family Office with a new buy last quarter. On the chart PLTR shares are forming a rising bear wedge pattern that measures to a $13 target on a break under $21. PLTR has also been notable weak while high multiple/growth stocks have rallied sharply. There is potential a large inverse head and shoulders bottoming pattern is forming and above $27.25 would measure to an upside target of $37. PLTR options are pricing in a 7.6% earnings move and 30-day IV Skew at -4 compares to the 52-week average of -5.2, bullish inversion. Notable trades in PLTR have included some longer dated opening put sales with 5000 October $18, 5000 February $22, 10,000 February $19, 7500 November $18, and 10,000 November $19. It has also been a favorite of opening call sales including 3000 January $23, 10,000 June 2022 $27, and 10,000 August $20. PLTR has seen some bullish trades recently with 2000 Dec. $21 calls bought on 7/19 and 1000 Dec. $22 calls bought on 7/14 while September $23 calls have accumulated 5000X and January $28 calls bought 4000X on 7/6. The PLTR Aug. 13th (W) $22 straddle for less than $2 looks underpriced to me with a reaction to results likely seeing shares as high as $26 or low as $18.