Palantir Technologies (NASDAQ:PLTR): A CAN SLIM Investment Analysis

The CAN SLIM investment methodology, created by William O'Neil, uses fundamental and technical analysis to find high-growth stocks with strong momentum. This methodical process assesses companies using seven main factors represented by the acronym CAN SLIM, concentrating on earnings increases, yearly growth patterns, new products or services, supply and demand factors, industry leadership, institutional investment, and the general market trend. Stocks fulfilling these strict conditions usually show both solid business foundations and positive price action.

Earnings and Revenue Momentum

PALANTIR TECHNOLOGIES INC-A (NASDAQ:PLTR) shows very strong quarterly growth that fits well with the "C" part of CAN SLIM, which focuses on current quarterly earnings and sales increases. The company's latest results display notable momentum:

• Quarterly EPS growth of 110% versus the same quarter last year
• Quarterly revenue growth of 62.8% year-over-year
• Three-year EPS compound annual growth rate of 43.1%

These numbers are much higher than O'Neil's suggested minimums of 20-25% for quarterly growth and 25-50% for yearly rises. The pattern of increasing growth indicates the company is building market presence and improving its operations.

Annual Growth and Profitability

The "A" part of CAN SLIM calls for solid yearly earnings gains, and Palantir meets this with steady, better-than-average results. The company's Return on Equity of 16.6% is above the method's 10% minimum, showing good use of investor money. This measure of profitability, along with the large earnings growth, places Palantir as a business with sound foundations and the ability for continued expansion.

Innovation and Market Position

Palantir's business approach represents the "N" factor with its new software platforms that act as main operating systems for government and business customers. The company's four main platforms, Gotham, Foundry, Apollo, and its Artificial Intelligence Platform, are examples of advanced technology in data integration and analysis. This concentration on new, exclusive technology solutions matches CAN SLIM's focus on companies providing new products or services that meet important market demands.

Financial Health and Institutional Support

The company's financial setup satisfies several CAN SLIM conditions at the same time:

• No debt, leading to a debt-to-equity ratio of 0
• Institutional ownership of 57.3%, much lower than the 85% limit
• Strong cash position with current and quick ratios of 6.43

The reasonable level of institutional ownership indicates potential for more institutional buying, which might create future upward price pressure. The absence of debt lowers financial risk and allows for continued spending on growth.

Technical Strength and Market Leadership

Palantir's price chart shows the industry leadership highlighted by the "L" in CAN SLIM:

• Relative strength of 96.5, performing better than 96.5% of all stocks
• Good long-term upward trend even with recent short-term price settling
• Considerable trading activity averaging over 55 million shares each day

The very high relative strength score shows that institutional investors acknowledge the company's growth possibility and have been building holdings. While the stock has seen recent price swings, its long-term direction stays positive, and it continues to perform much better than both its industry group and the wider market.

Complete Evaluation

According to Palantir's fundamental analysis report, the company gets a good score of 7 out of 10, with specific high points in growth (10/10) and financial health (8/10). The technical analysis report gives a score of 6 out of 10, pointing out the stock's strong yearly performance but varied short-term indicators. The main worry from a value standpoint is the high P/E ratio, although this is partially reasonable given the company's outstanding growth path and high-quality market standing.

The mix of very strong quarterly growth, good yearly expansion, new technology platform, debt-free balance sheet, and market-leading relative strength makes Palantir an interesting option for investors using the CAN SLIM methodology. The stock displays several features that O'Neil found were common in successful growth stocks before their major price gains.

Find More CAN SLIM Candidates

For investors wanting to locate other stocks that fit CAN SLIM conditions, our pre-configured screener offers continuous filtering based on the method's main factors. This instrument allows for more personalization depending on individual risk comfort and investment choices.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice, recommendation, or endorsement of any security. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions. Past performance is not indicative of future results, and all investments carry risk including potential loss of principal.