Barring the sell-off earlier this year, most tech stocks witnessed a blistering rally over the past year thanks to an increased demand for technology products and services amid the COVID-19 pandemic. However, not all stocks gained based on their business growth. Some fundamentally weak stocks took Wall Street by storm thanks to short squeezes triggered by young or novice investors on Reddit’s r/WallStreetBets (WSB) chatroom.
Following the forum’s huge success in squeezing short sellers out of their positions in GameStop (GME) earlier this year, by betting against them and buying the stock despite GameStop’s weak financials and growth prospects, WSB has targeted many other fundamentally weak stocks that possess high short interest and benefited by causing short squeezes in them too.
Palantir Technologies (PLTR – Get Rating), BlackBerry Limited (BB – Get Rating), and MicroVision, Inc. (MVIS – Get Rating) are among the top 10 most discussed stocks on the Reddit forum. We think these stocks are overvalued at their current price levels considering their weak financials and bleak growth prospects. So, they are best avoided now.
PLTR offers a suite of software applications for integrating, visualizing, and analyzing information. The company operates through two segments—commercial and government. It has built two software platforms: Palantir Gotham and Palantir Foundry. The software allows analysts within and between organizations to collaborate and to analyze large quantities of data.
In February, PLTR announced a multi-million-dollar expansion of its relationship with 3M Company (MMM), an American multinational conglomerate that operates in the worker safety, health care, and consumer goods areas. 3M will use Palantir’s Foundry platform to support its digital transformation in supply chain alerts, demand forecasting and business planning.
Also in February, PLTR and International Business Machines Corporation (IBM) partnered to merge hybrid cloud, artificial intelligence (AI), data processing, and operational technology in a new enterprise offering. The new solution, Palantir for IBM Cloud Pak for Data, is designed to l reduce data silos and cut out the technical expertise generally required to make use of AI analysis.
PLTR is scheduled to announce its fiscal year 2021 first quarter financial results on May 11, before the market opens. For the fourth quarter, ended December 31, 2020, PLTR’s loss from operations was $156.57 million, which represents a 6.2% rise year-over-year. Its net loss was $148.34 million and its loss per share was $0.08. Its total liabilities and shareholders’ equity increased 68.8% year-over-year to $2.69 million, as of December 31, 2020.
Analysts expect the stock’s EPS to be $0.04 for the next quarter, ending September 30, 2021, which represents a 40.9% decline year-over-year. PLTR’s stock price has gained 118.1% over the past six months and lost 38.8% over the past three months. It ended yesterday’s trading session at $23.88, which is 46.9% below its 52-week high at $45.
PLTR’s weak fundamentals are reflected in its POWR Ratings. The stock has an overall D rating, which equates to Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has a D grade for Value and Stability also. We have also graded PLTR for Growth, Momentum, Sentiment, and Quality. Click here to access all PLTR’s ratings.
PLTR is ranked #9 of 12 stocks in the F-rated Software – SAAS industry.
BB leverages artificial intelligence (AI) and machine learning to deliver solutions to enterprises and governments in the areas of cybersecurity, safety and data privacy, and endpoint security management, encryption, and embedded systems. The company operates through three segments—BlackBerry Spark, BlackBerry IoT Solutions, and BlackBerry IP Licensing.
Several lawsuits have been filed against BB on allegations of securities fraud or other unlawful business practices. On April 13, BB and…
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