After reaching a summit of $ 125 on February 18, Palant (Nasdaq 🙂 Actions dropped by 28% in a few sessions, falling to $ 90.68 by February 25.
The spark came from the news that the Pentagon plans to reduce US military spending by 8% in the coming years. Since government contracts represented approximately 40% of Palantant revenues in 2024, investors were concerned with the impact of a smaller defense budget.
The big question now-should we avoid investors, given the risk of catching a fall knife, or is there a chance for a rebound?
How to protect your sudden sales wallet
Judging a stock only by its recent performance is risky. No one can predict if he will plunge further or staging a return.
However, some key indicators must always be taken into account before investing. Ignoring them and simply jumping because of the media threshing on the market is no different from the game.
With InvestingPro’s Protips, the identification of these crucial factors becomes much easier. Here are a few to keep in mind.
Understand the price / benefit ratio and what it points out
Source: InvestingPro
For example, a high price / profit ratio (P / E) means that investors pay a bonus for each dollar of the company. Generally, a high P / E is considered a lower signal, suggesting that the stock could be overvalued and vulnerable to a correction.
In the case of Palantant, even after its recent drop, the P / E ratio is 460x. In comparison, Tesla – often considered as superinary – has a P / E less than 150x, while Nvidia is only 50 times.
Understand the P / B ratio
Another red flag is the high price of action compared to its accounting value, reflected in a high price / book ratio (P / B).
Source: InvestingPro
In the case of palantant, the P / B ratio amounts to 42.5x, against 5.3x for its competitors.
Measure volatility
To assess the risk of investing in an action, it is important to consider your beta version. A high beta means that the stock moves more dramatically than the market, …
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