Palantir Stock Selloff is a Buying Opportunity

Palantir stock price lost more than 25% of its value in the past five days alone as investors reacted to a surprise loss in the fourth quarter. Prior to the latest selloff, shares of the software platform rallied more than 250% in the last twelve months, thanks to robust growth in sales.

The latest selloff is supported by investors’ concerns over surprise loss. The company has reported a loss per share of $0.08 compared to the Wall Street consensus for the positive $0.02 earnings per share. Its shares are currently trading around $27, down from an all-time high of $45.

Buy the Dip in Palantir Stock

Goldman Sachs has provided a Buy rating with a price target of $34, citing “improving visibility into near- and long-term growth. The firm has also applauded Palantir’s “strong” Q4 results and praised the guidance of $4 billion in revenue by FY25.

The firm said:

The growing deal backlog and collaborations with the likes of IBM provide more visibility into how Palantir can achieve that target.”

The company has generated $1.1 billion in 2020 revenues, up 47% from the past year. Despite the past performance, the company is optimistic about future trends. It anticipated more than 45% revenue growth for fiscal 2021.

Strong revenue growth would offer support to its share price momentum in the days ahead. Moreover, the company has aggressively been working on improving its margins to move towards profitability. Value investors should use the dip in the stock price as buying opportunity. The share price of Palantir is likely to double this year from its current level.