Palantir Technologies (PLTR) reports first-quarter earnings before the market open on Tuesday. Palantir stock has swooned amid a broad decline in software growth stocks in 2021.
Analysts estimate Palantir earnings of 4 cents a share on revenue of $332.2 million for the quarter that ended March 31.
Palantir stock sold off when it reported December-quarter earnings on lower-than-expected 2021 revenue guidance.
Palantir slipped 6.5% to close at 18.47 on the stock market today as the Nasdaq Composite fell 2.5% and many software growth stocks once again sold off.
A direct listing of Palantir stock was launched on Sept. 30 priced at 7.25 a share. Palantir hit an all-time high of 45 on Jan. 27. The software stock has retreated nearly 58% from that high.
Even after the correction, Palantir stock trades at a high multiple of estimated revenue, Jefferies analyst Brent Thill said in a note to clients.
Palantir Stock Trades At High Revenue Multiple
“Overall multiples for software have contracted 18% thus far in 2021 taking a breather post their expansion of 56% in 2020 vs. 26% in 2019 and 7% in 2018,” Thill said in the report.
He added: “The five highest valued names (trading on a multiple of estimated 2022 revenue) under current coverage are Snowflake (SNOW), Cloudflare (NET), CrowdStrike Holdings (CRWD), Palantir, and Datadog (DDOG).”
Cloudflare stock popped on Friday after it reported better-than-expected March-quarter earnings.
Government agencies use Palantir software for intelligence gathering, counterterrorism and military purposes. The software maker aims to expand into the health care, energy and manufacturing sectors.
Heading into the Palantir earnings report, the software stock owns a Relative Strength Rating of 70 out of a best-possible 99.
For the December quarter, Palantir reported a profit of 6 cents per share, including stock-based compensation. Revenue climbed 40% to $322 million.
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