Palantir's 80-day moving average is descending and weighing on breakouts
When we last checked in with software stock Palantir Technologies Inc. (NYSE:PLTR), options bulls were having a field day despite its technical struggles. Almost a month later, has PLTR regained any traction on the charts?
In a word, no. Palantir stock was last seen trading at $11.11, not far from its Feb. 24 annual bottom of $9.74. Since stalling at $30 around September, the shares have carved out a channel of lower lows, with their 80-day moving average containing a rally back in March. One metric to watch going forward; PLTR's 14-day Relative Strength Index (RSI) of 20, which sits firmly in "oversold" territory.
Palantir has managed to grow their annual revenues by 159% since fiscal 2018 and reported a 41% increase for fiscal 2021. The company is also estimated to finish fiscal 2022 with 30.1% revenue growth and 53.8% earnings growth.
Moreover, PLTR holds an excellent balance sheet with $2.52 billion in cash and $260.07 million in total debt. However, despite Palantir’s high growth rate, their valuation continues to be high at a forward price-earnings ratio of 62.89 and a price-sales ratio of 14.92. This means Palantir stock could return to its 52-week low or reach new all-time lows in the short-term should the bear market continue fester. Still, the software offers a solid option for growth investors looking to invest for the long-term.
If options traders feel so inclined, Palantir stock's Schaeffer's Volatility Scorecard (SVS) sits at 91 out of 100, meaning the equity has exceeded option traders' volatility expectations during the past year.