Since its debut on the NYSE last September, Palantir shares have been on the rise, but should you invest in this secretive data company?
2019 was the year of the initial public offering (IPO), which brought investors the likes of Uber, Peloton, and *almost* WeWork. 2020, among many other things, was the year of the special purpose acquisition company (SPAC) or ‘reverse merger’, which brought us the likes of DraftKings.
Palantir (NYSE: PLTR), on the other hand, stayed true to its own nature and went down the much less traveled route of the direct listing. This means that simply sold shares to the public without the use of intermediaries, and did not raise capital, unlike through a traditional IPO.
What is Palantir’s stock symbol?
Palantir trades on the New York Stock Exchange under the ticker symbol PLTR.
How much does Palantir stock cost per share?
As of July 26, 2021, Palantir was trading at a price of $21.81 per share, with a market cap of approximately $40 billion — more than double its opening price from last September. However, it is still down roughly 7% year-to-date (YTD).
Prior to going public, the New York Stock Exchange set a reference price for Palantir’s direct listing at $7.25 a share. However, it closed out its first day worth more than $9 per share. In its prospectus, Palantir said that the average per-share price on the private markets in August was $7.31, while on September 1 it was $9.17.
The Wall Street Journal reported on September 24 that Palantir had informed investors that it expected to begin selling shares at $10 apiece, a price that would give the company a valuation of roughly $22 billion. Palantir put 475.8 million shares for sale on its direct listing day.
What does Palantir do?
That’s a very good question, and one any prospective investor should already know the answer to. First, let’s hear from their own mission statement:
Our mission is to help our users, the people doing the hard work on complex, real-world problems. We do this by writing software that enables effective analysis against complicated, data-driven problems.
Sounds like any standard Silicon Valley startup, but that’s where the comparison ends. Secretive and divisive, Palantir specializes in data-gathering and analysis, most of which it does for government agencies. As of Q1 2021, Palantir boasts 149 customers, up from 125 when it went public last September, which is where most of Palantir’s money comes from.
Is Palantir profitable?
Palantir posted a first-ever adjusted operating profit in Q1 2021, ending nearly two decades of sustained losses at the company. Annual operating income in 2020, excluding stock-based compensation and other items, was $190 million. It continues to lose money when accounting for those expenses. According to its Q1 2021 filing from mid-May, revenue rose 49% YoY to $341 million, with a GAAP loss per share of $0.07 — and it remains plagued by up-and-coming competitors in the field.
Should I buy shares in Palantir?
It depends on your appetite for risk, and be under no illusions about this: Palantir is a risky investment. Not only would you be betting on a company that has openly admitted to having no path to profitability, but it is arguably a bet that instability and terrorist threats will continue to plague the U.S.
Not only that, but Palantir has come under significant scrutiny from the general public in recent years for its role in aiding the U.S. Immigration and Customs Enforcement agency (ICE), as well as a recent agreement with the UK government to provide analysis on post-Brexit border control.
However, in an (unfortunately) increasingly volatile world of pandemics and civil unrest, it is likely that there will be no shortage of need for Palantir’s data services. It is not exactly a stock that I would go for personally, but for those with an appetite for risk, it could be a winner.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.