What happened
Shares of Palantir (PLTR 3.22%) gained 15.9% in March, according to data from S&P Global Market Intelligence. The data-analytics company's stock benefited from market momentum and bounced off a lifetime low that it hit in the previous month.
After big sell-offs in February, the S&P 500 index rose 3.6% last month, while the Nasdaq Composite index climbed 3.4% across the stretch.In addition to positive market momentum, Palantir stock also appears to have gotten a boost from favorable coverage from analysts.
Image source: Getty Images.
So what
Morgan Stanley's Keith Weiss published a note on Palantir on March 7, raising his rating on the stock from "underweight" to "equal weight." The analyst cut his one-year price target on the stock from $24 per share to $16, but that had more to do with investors' decreased willingness to buy stocks trading at highly growth-dependent multiples. At the time of the note's publication, the analyst's price target still suggested a 40% upside.
Piper Sandler analyst Weston Twigg then published a note on March 9, initiating coverage on Palantir. The analyst gave the stock an "overweight" rating and set a one-year price target of $15 per share, suggesting a 31.5% upside.
Now what
Palantir stock hit a lifetime low of $9.74 per share in February, following the release of fourth-quarter earnings results and guidance that the market viewed as disappointing as selling pressures affected the broader market. However, the company's share price saw significant recovery, in conjunction with rebound momentum for the broader market, in March.
Palantir now has a market capitalization of roughly $28.1 billion and is valued at approximately 14 times this year's expected sales and 70 times expected adjusted earnings. The company expects revenue of $443 million in revenue in the first quarter, with a non-GAAP (adjusted) operating margin of 23%. For the full-year period, the company is guiding for an adjusted operating margin of 27%, and it expects annual revenue growth of 30% or more each year through 2025. There's a favorable long-term demand outlook for Palantir's services, but its stock will probably continue to see movement affected by the market's overall appetite for growth-dependent software stocks.
