Hey guys how's it going it's Andy from Magoo investing happy Monday today we're going to be
talking about one of the most commonly discussed stocks that's been around on social media for
the past couple months with Palantir Stock (PLTR Stock) ticker symbol $PLTR this is a stock that
I originally had some negative associations with because of it being considered like a meme stock
but this week I’m going to be doing some analysis of some stocks you guys have requested and this
was a requested video so if there is a stock you guys would like me to go over in a future
video be sure to leave it in the comment section down below and I’ll get to it as soon as I can
so currently Palantir Stock (PLTR Stock) when I started making this video it was trading for like
$24 and as we've seen with the overall market where things started kind of green this morning
and then the tech stocks have started to sell off significantly compared to some of the
industrial stocks with the dow jones and so it was up two percent on the year and now it is down on
the year because Palantir Stock (PLTR Stock) is down around five to six percent at the time that
I’m recording this video what's really interesting is that this stock is at its lower half of the
52-week range so this is a stock that had a lot of momentum going into the end of the year
and then had a massive boost in January and that's fallen since that point and
that's why it is when I took that picture of the stock price it was positive at that time because
the major move started at the very beginning of January and it has fallen significantly
since that point so in part one I’m going to be talking about the news and kind of the earnings
report that has been moving the stock around and has pushed it from a high of 45 dollars
down to $22 I’m going to be presenting the info as objectively as possible because
I think it's important to look at companies from a an objective perspective and not try to think of
some of the biases that you might have towards a company because I think that might limit you from
buying into stocks that have actually really good potential so I’m going to try to do that
as objectively as possible then we're going to be hopping on the charts and talking about what I see
on there for technical analysis to see if there's a very good entry point and where the support and
resistance is that I’m going to be watching going forward and then part three I’m going
to give my overall thoughts on Palantir Stock (PLTR Stock) to your stock to your symbol $PLTR
and just kind of tell you where I’m feeling about it going forward before getting started
I do want to say that if you've been enjoying these videos I really appreciate it with the
like and subscribe button as it would help my channel out a lot we're getting closer to 10
000 subscribers so thank you all for that so what is Palantir Stock (PLTR Stock) they are a tech
company that's been around for around 17 years at this point this is a company that focuses mainly
on data analysis and I’m going to talk about more about what the company does in the future this
is a company that went public towards the end of September it was really interesting because it was
actually down on its first day of trading and when I think about some of the well-known IPO’s in the
past year I think of stuff like a lemonade stock (LMND Stock) an Airbnb Stock (ABNB Stock) even
if even a bumble stock (BMBL Stock) that were up significantly and wanted to see
if it's a common trend for these stocks that go IPO to have this very nice boost on the first
day and from the numbers that I could find the average IPO I guess it's not the average it's
the median was up 20% on its first date so it's interesting that Palantir Stock (PLTR Stock) did
not do well in its first couple days on the market but it has had a fantastic end of
2020 and had a very good first couple weeks of January so plant tier is an SaaS company which
stands for software as a service company they have three main branches of their company which
is Palantir Stock (PLTR Stock) foundry Gotham and apollo software this is a very secretive company
until they went public it was very difficult to find information on the company I don't know if
I’m just not the target demographic for who's looking for information on their website but
all of the different businesses that they run all three of them seem very similar and I had a
very difficult time kind of discerning what the differences between the three of them are but
basically what you need to know is that they're big data. So here's what the all-time chart looks
like the stock had a nice run up towards the start of December and then it spiked in early
2021 and since then it's fallen from levels uh right after the new year two its current levels
are around 22 dollars and it's down around 50% since its all-time highs and this begs
the question is this a stock that is on a fire sale and no one wants it or is it something that
is at a discount that could be a good buying opportunity because I love buying stocks that
I determine as being relatively cheap based off of their current value so we'll talk about that
so why did the stock move up so much and one of the interesting parts is that this was actually
a stock that became very popular on reddit and I’m sure that this is a reason why the stock came on
the radar for a lot of people Palantir Stock (PLTR Stock) is not a company that is very well known to
most people so getting the eyes in front of this company definitely pushed it in the direction that
it went towards the end of 2020 but this past month has been brutal for a couple reasons and
there's actually two of them the first one has to do with the end of its share lockup period after
its IPO I always talk about that it's a dangerous time especially if an IPO has done very well in
the first couple months after it's gone public because when you have a company go IPO you have
a restricted period you have these insiders that were given shares as being a part of the company
that aren't allowed to sell it for a certain amount of time it's usually like 180 days and so
after that share lock-up period expires especially if the stock has gone up significantly in value
during that time a lot of the insiders will sell off their profits because they've now been made
multi-millionaires just overnight and so they want to lock in some profits and maybe don't
want to have full exposure to this company they still believe in but don't want all of their
stock options to still be in a company that has gone up significantly in the past couple months
so the share lock-up period ended and a lot of shares were sold that was part of it and then
you had an earnings report that it's always interesting when you look at earnings reports
because you can always find something good about a company but then analysts will find something that
they don't like and it'll push the stock down and so basically what happened there is that
they had a very nice revenue beat and that's always a good thing you think oh revenue
stock probably went up after it they actually had a surprise loss and that pushed the stock down
significantly their net loss was for $580 million dollars but when you remove the stock compensation
from going public if that loss is only $338 million dollars I say only that's still a lot
of money in addition this is a company that has never had a profit in its 17-year history and I
usually think of that as being a really bad thing but we've seen in the past I think about companies
like plug power stock (PLUG Stock) ticker symbol $PLUG that have done very well in the past year
after not posting a profit in the 20-plus years that they've been a publicly traded company so
profitability is great but for tech companies it's not as big of a problem to not be profitable
from that report the company expects to hit 4 billion in revenue by 2025 and have revenue growth
in the upcoming year of around 30% and looking at their annual revenue for the past couple years
left to see some very nice revenue growth in the upcoming years to try to reach that target because
to reach 4 billion from their current levels of only one billion dollars 4x in revenue in four
to five years is really tough to do so let's talk about their customers because I think this is the
really interesting part in their 17 years of being a business they only have 125 customers total and
it's actually way less than that because the way they report things is each different government
agency that they work with they count as a different customer so the us government is
their largest customer overall at this point 53.5 percent of their total revenue comes from
government contract while they only have 125 customers if you put the us government contracts
into one that number would be way smaller based off their reliance on government contracts it's
not surprising to see that their average revenue per customer was almost 8 million dollars total
and then if you look at their top 20 customers they bring in 33 million dollars each in 2020 so
this is a company that does not have very many customers but the ones that they have
they bring in a lot of money for the company so that's just something to notice going forward
this is a company that spends a lot on sales and marketing it's really interesting that
in 2020 the company spent 61 percent of their total revenue on marketing and sales overall
the reason that they did this from their website I said that in many cases we launched at our expense
pilot developments with customers without a long-term contract in place so they're spending
money to try to bring people on board and that's at the expense of the company that's why their
sales numbers and their costs for associated with those sales are so high so we've talked about some
bad news recently let's talk about some of the stuff that has pushed up a little bit in the short
term after Palantir Stock (PLTR Stock) fell after the earnings report Cathie wood from the ARK etfs
came out and said that she was buying additional shares for her arc etfs having a very vocal bowl
on your side is always a good thing especially when it brings publicity to why a well-known bull
is bullish on your company overall and so some of the other stocks that Cathie wood has been
buying recently as she bought the dip on tesla and so putting those two together having someone
as well-known as Cathie Wood be on your side is definitely a good thing for the long term and
then the other big thing that came out recently is that Goldman sacs raised their price target to
$34 which is still it's almost like 50% from the current level so there's a lot of upside if you
believe what Goldman sacs has to say but let's hop on over the charts and talk about what I see their
overall because there could be a case made that if this is a stock that I absolutely love this
could be a good buying opportunity so let's head on to the computer and talk about what I see there
all right so here we are looking at Palantir Stock (PLTR Stock) ticker symbol $PLTR on the charts
and the first thing that really stuck out to me is that wow this is a very volatile stock
the fact that it's down more than five percent on the day and it's just a little blip over here like
it's a not that big of a move and so I’m looking and there's some big these are like 25% moves so
the first thing that sticks out to me is volatility is very high and so this is
something that you need to understand before ever buying into a stock is understanding how
the price moves over time because yes over the long term you can see oh it's up this
much over the past year but the volatility is where the emotional responses come from
and so understanding that buying into a stock like Palantir Stock (PLTR Stock) has a lot of
emotional responsibility because this is a stock that's going to swing violently in both directions
so these are the three zones that I’ve decided to draw from looking at the charts since this
is not a stock that's been around for a long time normally I do the one day chart but you don't see
the full movement of the stock because it has not been public for very long it went public back on
September 30th of this past year so I went to the 180 day four hour chart because I think this gives
a better indication of how the stock has been moving over time so the bottom area as of right
now it's at a pretty interesting zone this has been a support in the past it's touched it back in
December and this is the very beginning of January and so for the past couple of weeks it seems like
it's been trying to get below this level but it has not been able to we had this big sell-off on
I think this is Friday and it went down below the zone but closed still in the area so this
support has still stayed intact at this point and so when I’m looking at this stock
I’m looking for what's going to happen if it falls through the support and that's the main problem
that I see with this very long-term investment because if this holds there is a lot of room at
the upside you can still go up almost 70 percent to get to the this resistance that I drew at the
$39 mark but the problem is when I look to the downside I don't really see a an area where it
would make sense that it could stop you have this area down here maybe like fifteen dollars but from
twenty two dollars down to fifteen uh that's like thirty percent drop so that's always an important
thing to pay attention to is where is the next level that it could drop to because while it
looks like a decent opportunity right now it can continue to fall and so when I look to the upside
there is a lot of potential going from the current price up to this next resistance would be $35
and then going up to the final resistance that I have charted is 71% so this is the stock as you'd
expect it has very volatile moves and it does have a lot of move to the upside but there's
not a solid support so as of right now the buying opportunity looks decent based off of it sitting
out of support but since the risk of not having a solid support below it and the indicators
like the death cross right here where the 50 days crossed over top of the 200-day moving average
not looking that great so as of right now I’m going to put it as a neutral from what I’m seeing
on the charts so now that we've talked about the recent news stories and the catalysts that have
been moving the stock up and down over the past couple months let's talk about how I feel about
Palantir Stock (PLTR Stock) overall this is one of the more complicated stocks that I’ve looked
at in the past couple months and so I want to give three reasons why and three reasons
why I don't like Palantir Stock (PLTR Stock) for a long-term investment so let's talk about the three
reasons why I like Palantir Stock (PLTR Stock) ticker symbol $PLTR for a long term investment
the first one is that they have great looking guidance at this point they reach 1 billion
in revenue in 2020 and they expect that number to get to 4 billion by 2025. that is a lot of revenue
growth forex in your revenue in just five years would be very impressive and since they believe
that's possible that's a lot of growth for the company going forward number two is that it's not
as overextended as it once was this was a company that hit highs of $45 just a couple months ago
and now it's down sitting around $20 so this was a company that I really believed in I would consider
this to be an extreme discount and then number three this is a company that Cathie wood has been
very bullish about overall and having a vocal bull like Cathie wood from the Ark etfs being on your
side has a significant pull when it comes to the overall market considering that she's been buying
the dips on other companies like Tesla Stock (TSLA Stock) which he's been very vocal about
in the past but Palantir Stock (PLTR Stock) has a stock that I think has a lot of red flags and so
I wanted to talk about three reasons why I don't love Palantir Stock (PLTR Stock) for a long term
investment the first is that they don't have a lot of customers they only have 125 customers
in the 17 years that they've been a company and that number is actually way less if you
consider that each of the government agencies are considered as a different customer so what that
means is that their top customers on average the top 20 of them brought in 33 million dollars per
account that's great for right now but if you have a problem and you lose an account that's
a significant hit to the company and when I think about some of the changes that's going to be going
forward with big tech that kind of worries me a little bit number two they rely heavily
on government contracts in 2020 53.5% of their revenue overall came from government contracts
until they've proven that they can do well in the private sector that kind of worries me about
hitting their growth targets that they've set for 2025. and then number three it's a huge red
flag with their spending on marketing they spent 61 percent of their revenue overall on marketing
that included six hundred thousand dollars in travel stipends for their CEO and one million
dollars in plain chartering costs considering they'd never had a profit in the 17 years that
they've been a company and the fact that they had a wider than expected loss in the past quarter
that does worry me for a long term investment so overall Palantir Stock (PLTR Stock) stock ticker
symbol $PLTR is one of the more interesting stocks we've seen in a long time their guidance looks
very good for the future and if you believe the things that they're saying I think this could be a
good opportunity especially considering that's at a significant discount but talking about some of
the red flags that I’ve been seeing it does worry me a little bit especially the momentum driven
increase in price that we've seen after IPO’d back in September so as of right now I’m going to give
it like a six out of ten it's not a stock that I really dislike but because of what we've been
seeing in the overall market I don't think this has a spot in my portfolio at this point
especially considering that the tech stocks have been selling off significantly I don't think this
is going to be the bottom and since on the charts that I mentioned that there's not a solid support
below this it's going to be really interesting to see if the stock market continues to fall
and pulls Palantir Stock (PLTR Stock) down with it to see where it ends up so let me know what
you guys feel about Palantir Stock (PLTR Stock) overall do you think it's a good stock to buy
right now are you going to wait further to see what happens also if there's other stocks you guys
would like me to discuss in future videos be sure to leave them in the comment section down below
thanks for watching this video I appreciate all support and I will see you in the next video