Shares of Palantir Applied sciences (PLTR) – Get Report had been decrease on Wednesday after analysts at Citi reduce the software program firm to promote from impartial, citing concern about its valuation and development prospects.
Citi analyst Tyler Radke referred to as the inventory “weak” in 2021. Radke nonetheless elevated his worth goal on the Denver firm to $15 a share from $10.
Palantir shares eventually examine had been down 2.3% to $25.58. The corporate went public on the finish of September in a direct itemizing, which bypasses the same old IPO course of in favor of enabling present holders to promote shares to the general public.
Its reference worth for the providing was $7.25 and it began buying and selling at $10. In late November it traded as excessive as $33.50.
“Particularly we see danger across the lapping of covid-19-related contracts, which have the potential to change into headwinds in second-half 2021 into 2022,” Radke mentioned.
“We’re additionally extra skeptical on the PLTR bull case within the industrial enterprise, the place
there may be optimism that PLTR’s simplified new merchandise can drive an inflection in
buyer development. Right here, we see excessive ranges of competitors and the shortage of funding
by PLTR within the ‘proper areas’ limiting success.”
The agency sees slowing development as a significant factor that would weigh on the inventory within the new 12 months.
“The bull case for PLTR rests on the flexibility to considerably increase its small about 130- buyer base through the industrial phase by promoting a extra modularized product
portfolio, which reduces friction. Whereas this can be the precise technique, we’re skeptical
that this will likely be profitable,” Radke wrote.
Citi recognized Palantir’s Know-how Demo Day on Jan. 26 and its fourth-quarter earnings report in mid-February as the following catalysts for the corporate. The post-offering share-lockup interval ends three days after its earnings launch.