Palantir Technologies (NASDAQ:PLTR) Stands Out as a High-Growth CANSLIM Pick

For investors looking for a methodical way to find high-growth market leaders, the CANSLIM method, created by William O'Neil, is a foundational plan. It mixes detailed fundamental study with important technical signs to find stocks with solid earnings momentum, support from large investors, and better price performance. The aim is to locate companies showing major growth in their early phases of market notice, preferably before a large price advance.

A recent filter using the main CANSLIM rules has identified Palantir Technologies Inc-A (NASDAQ:PLTR), a maker of central operating system software for data study. We will look at how this company matches the plan's important standards.

Solid Current and Yearly Earnings Growth

The "C" and "A" in CANSLIM focus on current and continued earnings strength. Palantir shows very high growth on both points, a main reason for its selection.

• Current Quarterly Earnings (C): The company noted a very high 110% year-over-year growth in EPS for its latest quarter, well above the plan's usual lowest limit of 20-25%. This points to strong, speeding business momentum.
• Yearly Earnings Gains (A): Over the last three years, Palantir has recorded a notable EPS Compound Annual Growth Rate (CAGR) of 43.1%, clearly higher than the 25% mark. This shows the growth is not a single-quarter event but a continued pattern.

These numbers are important because they spot companies going through major increases in profitability, a main feature of market leaders before they are commonly known.

Market Position and Large Investor Support

The "L" and "I" rules center on a stock's market standing and the involvement of institutional investors.

• Leader or Laggard (L): Palantir has a strong ChartMill Relative Strength (CRS) score of 92.78. This means its price action over the past year has been better than almost 93% of all stocks. High relative strength is a technical sign that the market is valuing the company's fundamental health.
• Institutional Support (I): Ownership by large investors is about 60.1%, which is in a good area. It shows professional investor attention without being so high that all possible institutional purchases may be done. The plan prefers stocks where institutions are buying, not those they already completely hold.

A high relative strength score confirms the stock is a present market leader, while reasonable institutional ownership implies there is space for more buying from big funds.

Financial Soundness and Share Availability

The "S" rule looks at share availability, demand, and financial steadiness.

• Debt and Financial Health: Palantir works with no debt, leading to a Debt/Equity ratio of 0. This outstanding balance sheet health gives major operational freedom and lowers financial risk, matching well with the plan's liking for companies with little debt.
• Profitability Measures: The company's Return on Equity (ROE) of 16.6% is above the 10% minimum, showing good use of shareholder money to create earnings.

A clear balance sheet and good profitability measures are key, as they give the base for continued growth without the burden of financial trouble.

Summary of Fundamental and Technical Points

A look at Palantir's specific reports gives a combined picture:

• Fundamental Study: The fundamental report gives PLTR a score of 7/10. It notes "excellent" growth and profitability, with high margins and a very strong balance sheet. The main point of care is price, with the report saying the stock is "valued quite expensive already"—a usual feature for high-growth CANSLIM picks.
• Technical Study: The technical report shows a more varied near-term picture, with a score of 4/10. While the long-term direction is neutral and the stock has very good yearly performance, the short-term direction is negative, and the price has moved up and down. The report indicates the stock "does not offer a high quality setup at the moment," suggesting investors watch for a better consolidation pattern before thinking about a new entry.

This difference between strong fundamentals and a difficult near-term technical position is a standard situation for CANSLIM investors. The plan states that fundamental rules find the candidate, but technical study decides the timing. The present market direction ("M" in CANSLIM) also needs thought; with the S&P 500's short-term direction positive but long-term direction neutral, being selective is important.

Final Points

Palantir Technologies makes a strong case for investors using the CANSLIM structure. It meets the main fundamental parts: very high quarterly and yearly earnings growth, high relative price strength, institutional attention, and excellent financial health. These items make it a clear growth stock pick. However, the present technical study implies waiting could be wise, highlighting the plan's rule to match entries with good market direction and correct chart formations.

For investors wanting to find other companies that pass similar strict growth filters, you can review the set O'Neill CANSLIM High Growth screen.

Disclaimer: This article is for information only and is not investment advice, a suggestion, or an offer to buy or sell any security. Investors should do their own study and think about their personal money situation before making any investment choices.