Why Palantir Technologies Shares Are Falling

Palantir Technologies Inc. PLTR shares are trading lower after RBC Capital downgraded the stock from Sector Perform to Underperform and lowered its price target from $26 to $19.

RBC Capital analyst Rishi Jaluria noted 4 key catalysts:

1. We believe Palantir got direct benefits from COVID-related spending and those benefits have already faded.
2. We do not believe revenue from SPAC investments is sustainable, especially given the relatively small size of the companies Palantir is investing in.
3. Given the deceleration on both Government and Commercial (ex-SPAC) businesses, we find the company's target of 30%+ growth every year to 2025 is hard to underwrite.
4. Even with the pullback in shares, Palantir's valuation seems full to us, given the coming expected slowdown in growth and unsustainable SPAC investments.

Palantir Technologies Inc. builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations.

Palantir's stock was trading about 6.3% lower at $22.73 per share on Wednesday at the time of publication. The stock has a 52-week high of $45 and a 52-week low of $14.40.