I’ve written about Palantir (NYSE:PLTR) on many occasions. And every time I do, I’m struck by the polarizing sentiment that surrounds PLTR stock.
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It’s not too different from the reactions to the Super Bowel halftime show that I’ve noticed. A spin through my social media timelines showed that the entertainment drew polarizing reactions. For some it was THE BEST HALFTIME SHOW EVER (yes, in all caps). Others gave it a review that used more colorful language.
Which brings me back to Palantir. I’ve been generally bullish on PLTR stock. But I’ve come to believe that the big data company is simply not every investor’s thing. This sentiment shows up in its stock price chart. For the first 10 months of 2021, the stock bounced around a lot but investors didn’t have much to show for it.
And then November came. Since then, PLTR stock has gotten lumped in with other growth stocks. At one point, it had dropped over 50%. However, heading into earnings, sentiment is turning more bullish.
If you’re not that familiar with this name, let me explain why I believe the stock is still a sound long-term buy.
PLTR Stock: Revenue Continues to Grow
Palantir just recently released its fourth-quarter earnings report. Expected to be around $418 million, revenue for the period actually came in at $433 million. There are three important takeaways with this.
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First, revenue growth was more than 34% year-over-year (YOY). Second, the company has continued to beat analyst revenue forecasts since going public. And finally, Palantir is also continuing its streak of beating prior-quarter revenue.
This is also significant because the company has been showing growth in both the government and commercial sides of its business (although the majority of its revenue does continue to come from the former). Still, Palantir sequentially improved on how much revenue it brought in on the commercial side. In Q3, it saw a 37% YOY increase in commercial revenue. In Q4, it saw 47% YOY growth.
Of course, investors may be concerned about the company’s earnings per share (EPS). That was expected to come in at 4 cents per share and missed by 2 cents. That’s certainly not ideal.
About That Insider Selling
It’s also not the only cause for concern. In particular, I understand why investors turn the dial on PLTR stock due to the amount of shares being sold by company insiders. Fellow InvestorPlace contributor Josh Enomoto had the following to say about the selling:
“[Y]ou might argue that this is merely capitalism in action: executives are merely actualizing the benefits of taking a big risk on Palantir and succeeding. However, they could succeed more if they knew that PLTR stock would rise in value.”
However, when we look closer, much of the selling late in 2021 was due to expiring options. If the insider selling continues at the same pace in 2022, I may change my tune. For right now, though, it’s something I can’t get that upset about.
Palantir May Not Be Your Jam
I was clearly not the target audience for the Super Bowl’s celebration of hip hop. It’s a genre I can appreciate, but it’s not my cup of tea by any means.
That same sentiment can be true when it comes to investing. Like with music, your taste may not be the same as mine — and vice versa. But that doesn’t necessarily mean one is better than the other.
In my opinion, Palantir will be a solid buy until it shows me that it’s failing to grow its business. However, as I summarized in my last article, that doesn’t mean you have to buy PLTR stock. If you feel uncomfortable about the company’s business model, or if the volume of shares sold by insiders upsets you, by all means stay away.
On the date of publication, Chris Markoch did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.
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