Companies that list on the public markets have an edge. Insiders are selling at the stock’s near peak
valuation. Palantir (PLTR) is one such company. Insiders, especially the Chief Executive Officer benefited
by selling vested shares.
The timing is impeccable.
On May 9, 2022, Palantir posted poor first-quarter results. The stock plunged to new lows. By the end of
the week, Nasdaq’s 3% daily rally eased PLTR’s overall loss for investors. The company posted revenue
of $446 million, up by 30.8% year-on-year. On a non-GAAP EPS method, it earned two pennies.
Commercial revenue rose 54% Y/Y. While customer count grew by 86% Y/Y, government revenue only
rose by 16% Y/Y.
Palantir counted on government contracts supporting its growth targets. For Q2, the company guided to
a base case of $470 million. Analysts expected revenue of $483.76 million. The adjusted operating
margin will be 20%. For 2022, the adjusted operating margin will be 27%.
Investors should examine Palantir’s adjusted figures and non-GAAP. It lost 5 cents on a GAAP EPS
measure. It cut sales and marketing, along with research and development costs. General and
administrative costs fell. In addition, total stock-based compensation fell from $193.7 million last year to
$149.3 million.
Takeaway
Wait for insiders to start buying shares. That would suggest they believe the company is inexpensive and
will rise. Until then, avoid PLTR stock.
