Why Did Palantir Stock Pop Today?

• Palantir banal was down arsenic overmuch arsenic 23% astatine 1 constituent past month.

• Investors are buying 50% much Palantir calls than puts this week.

• 10 stocks we similar amended than Palantir Technologies ›

Palantir (NASDAQ: PLTR) investors had a horrible November, arsenic shares of the tech wunderkind tumbled 23% from an all-time precocious deed aboriginal successful the period to a debased beneath $155 little than 3 weeks later.

Then Palantir bounced.

By month's end, shares of the authorities contractor and artificial quality superstar banal regained 8% of its losses. As the calendar flips to December, Palantir's tally isn't done. Shares roseate 3.2% done 10:40 a.m. ET Tuesday -- contempt a deficiency of evidently bully news.

No evident recent news, that is. Longer term, the trends down Palantir attest to the spot of the business, which has grown its gross astir 4 times successful size implicit the past 5 years (according to information from S&P Global Market Intelligence), and flipped from reporting ample losses to humble and increasing profits.

Over the past 12 months, Palantir has earned $0.43 per share. Free currency travel looks adjacent stronger, up to astir $1.8 billion, and moving astir 64% up of reported nett income. (So Palantir is really adjacent much profitable than it looks.)

Investors contiguous look to beryllium betting this beardown maturation volition erase past month's losses and support driving the banal higher. StreetInsider.com information shows investors this week are betting astir 1.5-to-1 connected telephone options alternatively than puts. And yet, past month's sell-off inactive raises concerns.

Why did Palantir banal merchantability disconnected successful the archetypal place? Because it's incredibly expensive. Its price-to-sales ratio is successful the triple digits, and Palantir trades for much than 388x reported earnings. That mightiness beryllium OK if the banal was doubling net each year, but astir analysts forecast a semipermanent maturation complaint of little than 50%.

With those numbers, Palantir banal remains a merchantability for me.

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