Palantir (PLTR) stock rose 2.6 percent on June 17, which took its month-to-date returns to almost 11 percent. The stock is outperforming the S&P 500 in June and is also among the top discussion topics on Reddit group WallStreetBets. How high can PLTR stock go and is there a possibility of a short squeeze?
Palantir went public in 2020 through a direct listing. The company had a market capitalization of $21 billion after the listing. The stock went on to hit an all-time high of $45 but crashed over 43 percent from the peaks. There has been an ugly sell-off in growth names and Palantir isn't an exception.
Palantir stock news
While U.S. stock markets were weak on June 17, Palantir stock closed with gains and outperformed the markets. This could be because it was featured among the top discussions on Reddit group WallStreetBets.
Palantir also announced that “it was named as a 2021 Global AWS (Amazon Web Services) Partner Network (APN) Public Sector Partner Award winner for its Palantir platform in its work to combat COVID-19.”
On June 18, Palantir announced that the U.S. Federal Aviation Administration has entered into a contract with the company to modernize its aviation safety program. Palantir has been partnering with several public and private enterprises since it went public. However, the company’s association with governments made some investors apprehensive.
How high can PLTR stock go?
Among brokerages, Goldman Sachs is the most bullish on PLTR and has a target price of $30. Goldman Sachs had a target price of $34 previously but lowered it by $4 in May. Still, the target price implies an upside of almost 20 percent from the closing prices on June 17.
There's upwards momentum in PLTR stock. While the stock opened lower on June 18, it soon turned positive for the day even though the broader markets were in the red. Although the stock has been outperforming the S&P 500 so far in June, it's underperforming the index on a YTD basis.
PLTR stock Reddit
Palantir stock is popular on Reddit. There's a separate Reddit with over 34,000 members to discuss the stock. A post on WallStreetBets talked about the massive government contracts that PLTR gets. The post also compared Palantir to Salesforce, which is now a $225 billion dollar market cap company.
The user also said that Palantir doesn't have any competition and assigned a target price of $80 on the stock, which it will likely hit before the end of the year. That is almost three times the Wall Street high target price. However, as we’ve seen with names like AMC Entertainment and GameStop, Reddit stocks can trade way above mainstream analysts' value.
PLTR stock short interest
According to the data from Fintel, PLTR stock had a short volume ratio of 9.4 percent on June 17. The short volumes aren't much compared to some of the other stocks targeted by WallStreetBets for a short squeeze.
Palantir stock valuation
Currently, Palantir stock trades at an NTM EV-to-sales multiple of almost 29x. The company’s revenues are expected to increase 35 percent in 2021 and 29 percent in 2022. While the valuation might seem high considering the growth rates, PLTR is a long-term play on data analytics. Also, the company has a strong moat. The stock looks attractive after the massive correction. If Reddit traders can get their act together, the stock could rise more from these levels.