Palantir Technologies Inc. (NYSE: PLTR) shares have advanced more than 15% since the beginning of August 2021; the company reported better than expected second-quarter results last week and expects to see strong trends in the third quarter.

Fundamental analysis: Palantir expects strong trends in the third quarter

Palantir’s business has proven improvements throughout the second fiscal quarter, and the company reported better than expected results last Thursday. Total revenue has increased by 49.1% Y/Y to $375.64 million, while the second quarter’s non-GAAP EPS was $0.04 (beats by $0.01).

The US commercial revenue grew 90% from the second quarter of 2020, and Palantir closed 62 deals that are worth above $1 million. Nearly half of those 62 deals are valued at $5 million or more, while twenty-one deals were worth $10 million or more.

During the second quarter of 2021, Palantir added 20 new customers, so the total number grew 13% quarter-over-quarter. The average revenue of the top 20 customers has increased from $36 million in the first quarter of 2021 to $39 million in the second quarter of 2021.

“A cutting-edge product and continued efficiencies and distribution drove exceptionally strong year-over-year Q2 results. Product innovation is at the core of these results and the momentum that’s driving our business forward,” said Shyam Sankar, Chief Operating Officer of Palantir.

Palantir Technologies updated financial guidance for the third quarter and expects total revenue to be around $385 million while the adjusted operating margin should be around 22%. The company also raised its full-year free cash flow outlook from $150 million to above $300 million, and it is important to mention that the annual revenue growth is expected to be more than 30% higher between 2021 through 2025.

The revenue outlook topped Wall Street estimates, and Palantir shares have advanced more than 15% since the beginning of August 2021. Palantir is in a good position to grow its business, but this stock is not undervalued with a $46.8 billion market capitalization.

The company is still not profitable on a fiscal year basis; the book value per share is around $1 and according to the latest news, Stanley Druckenmiller’s Duquesne Family Office LLC pared stake in Palantir to 4.01 million shares from 5.98 million.

Technical analysis: Palantir shares have advanced more than 6% this WednesdayData source: tradingview.com

Palantir shares have advanced more than 6% this Wednesday, and according to technical analysis, the bulls remain in control of the price action for now. Rising above $28 supports the positive trend, and the next price target could be around $30.

On the other side, if the price falls below $24, it would be a “sell” signal, and we have the open way to $22 support.

Summary

Palantir reported better than expected second-quarter results last week and expects to see strong trends in the third quarter. Palantir shares have advanced more than 6% this Wednesday, and if the price jumps above $28, the next price target could be located around $30.

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