Although leading data mining company Palantir Technologies (PLNTR) has witnessed strong growth in its government-sector business, its growth prospects could be limited if the company does not aggressively expand its commercial operations. Furthermore, given that the company is now dealing with controversy regarding its contract with the U.K.'s National Health Service that could also hurt its stock performance, let’s evaluate if it is wise to buy the stock at its current price level. Read on.Big data analytics and software company Palantir Technologies, Inc. (PLTR) offers primarily software platforms for government operations in the defense and intelligence segments. The company also offers a central operating system for companies’ data to transform the way they operate their businesses.
Although shares of PLTR have gained slightly over the past six months thanks to decent growth in its government-business revenue over the years, the stock has retreated 2.8% over the past three months. PLTR’s stock is currently trading at $24.03, 46.6% below its 52-week high of $45.
PLTR’s heavy dependence on the U.S. government business and the stock’s lofty valuation remain the key concerns for investors. These concerns, along with PLTR’s weak profitability, could cause the stock to suffer further price declines amid an investor rotation away from tech stocks. So, here is what we think could influence PLTR’s performance in the near term: