Is Palantir a Good Investment?

PHOTO CREDIT: Palantir

OVERVIEW

Palantir Technologies Incorporation is a company based in the United States. The company designs and sells software products and services. This software utilizes data mining techniques in order to extract key sets of information. This software is used by many government agencies to do everything from counterterrorism, catching criminals, and many other tasks that rely on data mining. The company was founded in 2003.

Why You Should?

  1. Palantir is a great growth stock in an investor’s portfolio. The company’s software products will continue to rise in popularity in the future as government agencies and other clients rely on the company’s reliable data mining techniques. As Palantir gets more contracts, the company will see better revenues and profits, which will cause the stock price to move higher.
  2. Palantir will benefit from many success stories from government agencies using Palantir technologies to take down terrorists and other things. For example, the company’s technologies were used to take down Osama Bin Laden after 9/11. This has benefited the company’s future growth and will also benefit investors in the company.
  3. Well-known investors such as Cathie Wood, the founder of Ark Invest, have taken stakes in this company. She called Tesla’s rise to success and has reported great returns during the financial year of 2020. If she and other investors continue to throw their support behind Palantir, the stock will continue to move higher. This will benefit the company and its investors.
  4. Palantir has seen rising revenues over the past couple of financial years due to the reasons mentioned above. This comes to show the vast popularity of the company’s software products. This has helped the company’s growth plans and has also benefited investors in the company. In the financial year of 2020, the company reported revenues of around 1.09 billion. This was higher than what the company reported in the financial year of 2019 when they had revenues of around 742.55 million.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. Palantir is one of the most controversial companies listed on the NYSE. Despite the many success stories the company has, the company’s software is also used by ICE to deport individuals and may be used unethically by other government agencies in the future. Until the company finds a way in order to prevent the unethical usage of its software, it might continue to be a risk for investors in the company.
  2. Palantir only has around 125 clients around the world. If some of these clients move away from the company, this can really hurt the company’s financial and operational results. Until the company can branch out and gain more clients, this is another risk for investors in the company to worry about.
  3. Despite the rising revenues the company has reported revenues in the past, the company still continues to report rising losses as well. These rising losses will hurt the company in the future. This risk will also hurt investors in the future. In the financial year of 2020, the company reported a loss of around 1.17 billion. This was higher than what the company reported in the financial year of 2019 when they had revenues of around 579.65 million.
PHOTO CREDIT: Yahoo Finance

MY OPINION

I think that investors should wait before investing in Palantir. This is because the company has been the center of some controversies, the small number of clients that the company has, and because of the rising losses the company reports despite also reporting rising revenues. However, the company remains a great growth play in an investor’s portfolio, the many success stories, well-known investors taking positions, and rising revenues, which will benefit investors.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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