What happened

Palantir Technologies (PLTR -6.73%) continued to generate solid, if not exceptional, results through the first half of 2022, but investors were unimpressed. Shares of the defense and commercial data analytics company lost 50.2% of their value in the first six months of 2022, according to data provided by S&P Global Market Intelligence, as the market continues to reassess this one-time highflier.

So what

Palantir hit public markets in September 2020 to great fanfare, and the stock jumped as much as 300% in its first six months. Palantir is a Peter Theil-backed analytics company best known for its reported role in the capture of Osama bin Laden. Investors saw great potential for the company as it worked to push its software to new government and commercial customers.

But the stock has given it all back and more in the last year and now trades below its $10 initial public offering (IPO) price. Palantir has posted steady growth during its time as a public company and continues to forecast annual revenue growth of 30% or greater through 2025. But that hasn't been enough to keep up with investor expectations.

The company's shares fell sharply in May after it reported first-quarter earnings that missed Wall Street expectations. There have also been questions about the sustainability of the commercial growth it reported, given that a lot of its new commercial customers are also companies that it has invested in. On the government side of the business, several defense contractors have complained about sluggish awards in the first half of 2022.

Palantir is doing what it can to expand its geographic footprint, with CEO Alex Karp making an early June visit to Ukraine to discuss ways his technology could help in the war effort. But it's hard for investors to quantify what any additional war-related business will mean to total revenue.

Now what

There's nothing wrong with Palantir, the business, but investors still can't figure out what to make of the company's stock. Even after the sharp declines in 2022, Palantir still trades at more than 11 times sales. That's rich for a defense contractor.

Well-regarded defense IT and intelligence-specialist Booz Allen Hamilton trades at 1.49 times sales. But it seems reasonable for a commercial data analytics specialist. Snowflake today trades at 33 times sales.

Palantir is somewhat of a hybrid, and neither comparison fits, leaving real questions about how the market should value it. As each quarter passes without the sort of breakout that growth investors have come to expect from commercial IT businesses, Palantir's momentum continues to fade.

In a difficult market for stocks, in general, and high-growth tech stocks, in particular, Palantir can't seem to find a lot of investors eager to buy in and hope for the best.