Palantir Stock Analysis: Will It Continue to Grow in 2024?

Palantir Technologies Inc. (PLTR) has experienced a significant increase in its stock value in 2023, with a 170% yearly gain. However, this growth has raised questions about whether the stock can continue to grow in 2024. In this article, we will analyze the current state of Palantir, its potential for growth, and the factors that may influence its future performance.

Current State of Palantir
Palantir’s stock performance and financials may not be appealing to new investors. The company launched its initial public offering (IPO) in September 2020 during a bull market. Despite the initial optimism, the stock experienced a massive sell-off, leading to a loss of as much as 87% of its value. Even now, Palantir stock sells at a discount of more than 60% from its $45 per share high in early 2021.

Palantir’s financials are respectable but may not be enough to attract tech growth investors. In the first three quarters of 2023, the company’s revenue reached $1.6 billion, a 16% increase compared to the same period in 2022. However, Palantir’s performance is short of the expectations set by CEO Alex Karp, who forecasted a 30% revenue growth rate for the 2022-2024 period.

Potential for Growth
Palantir’s focus on artificial intelligence (AI) has made it a leader in big data. The company began by serving national security and law enforcement entities through Gotham. However, the limited client base on the government side prompted it to develop a commercial version of the software, called Foundry. Foundry helps businesses make better decisions and solve problems, and Forrester estimates that it delivers a 315% return on investment (ROI) for its users.

Moreover, Palantir is profitable, with a forward price-to-earnings (P/E) ratio of 71. Although this ratio may give investors second thoughts, the price-to-sales (P/S) ratio of 19 suggests that the stock is more likely to rise than fall.

Factors Influencing Future Performance
Several factors may influence Palantir’s future performance. First, the company’s leadership in AI has positioned it as a leader in big data. This advantage may lead to significant improvements in the company’s performance.

Second, Palantir’s Foundry software has been shown to deliver a high ROI for its users. This success may attract more businesses to adopt the software, leading to increased revenue for Palantir.

Finally, the company’s current financials may not be enough to attract tech growth investors, but its strong performance in AI and big data may change this perception. As investors become more aware of Palantir’s potential, the stock may experience further growth.

Conclusion
In conclusion, Palantir’s stock has experienced significant growth in 2023, but questions remain about whether it can continue to grow in 2024. While the company’s current financials may not be appealing to new investors, its leadership in AI and big data, as well as the success of its Foundry software, may lead to further growth. As investors become more aware of Palantir’s potential, the stock may continue to rise in value.