Big data and analytics player Palantir Technologies stock (NYSE:PLTR) has declined by close to 18% over the last month, underperforming the S&P 500 which remains down by about 5% over the same period. Now, the company has actually seen quite a bit of positive news in recent weeks. Results for the third quarter, published in early November, were stronger than anticipated, with revenue rising 22% versus last year. Moreover, Palantir also won multiple government deals, including a contract renewal with the Centers for Disease Control and Prevention and another contract from the U.K Defense ministry. That being said, investors are likely concerned about the company’s slowing growth rates. Guidance for Q4 2022 points to revenue growth of just about 15%, down from 26% growth in the year-ago period. This is an issue, given that the company is barely profitable and is still valued like a growth stock. Moreover, Palantir’s commercial business could also face some headwinds amid a tough macro environment and rising interest rates.
However, now that Palantir stock has seen a decline of about 18% over the last month, will it continue to decline in the near term, or is a rally imminent? Going by historical performance, there is only a 40% chance of a rise in PLTR stock over the next month. There were 95 instances in the last two years when Palantir Technologies (PLTR) stock saw a trailing 21-day drop of 18% or more, 38 of those instances resulted in PLTR stock rising over the subsequent one-month period (21 trading days). This historical pattern reflects 38 out of 95, or about a 40% chance of rise in Palantir Technologies stock over the next month. See our analysis on Palantir Stock Chance of Rise for more details.
Calculation of ‘Event Probability’ and ‘Chance of Rise’ using the last two years data
- After moving -5.5% or more over five days, the stock rose in the next five days on 43% of the occasions.
- After moving -18% or more over ten days, the stock rose in the next ten days on 63% of the occasions.
- After moving -18% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 40% of the occasions.
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This pattern suggests that PLTR stock is unlikely to see major gains in the near term.
|S&P 500 Return||-6%||-20%||71%|
|Trefis Multi-Strategy Portfolio||-7%||-23%||210%|
 Month-to-date and year-to-date as of 12/28/2022
 Cumulative total returns since the end of 2016