Palantir Vulnerable With Valuation And Lockup Concerns, Citi Says

Shares of Palantir Technologies PLTR are up over 150% since going public with a direct listing in September. The rise in the share price has prompted a sell-side downgrade.

The Palantir Analyst: Citi downgrades Palantir's stock to Sell/High Risk and raises the price target from $10 to $15.

The Palantir Takeaways: With the rise in the company’s share price, Citi analysts say the company looks vulnerable in 2021. COVID-19 contracts were a big part of the growth in the last fiscal year and those could cause tough comparables if they're not renewed or expired.

The commercial business is the main concern for Citi analysts. High levels of competition and a lack of investment by Palantir in the right areas of the business are concerns.

Related Link: Palantir Shares Sink As Company Raises Guidance, Lands Major Contracts In Q3

Stronger government contracts are seen as positive for the company and the reason for the price target increase.

Palantir is scheduled to report fourth-quarter earnings in February. A large share lockup expiration will be around the time of earnings, creating two large catalysts happening around the same time.

PLTR Price Action: Shares of Palantir are up 2% to $26.72 at publication time.

Photo courtesy: Cory Doctorow via Flickr