Palantir Did Not Win the FAA Contract for SMART. Time to Buy the Stock Anyway?
Yahoo Finance ·
The Federal Aviation Administration (FAA) just announced plans to roll out a new AI-based system it calls Strategic Management of Airspace, Routes, and Trajectories, or SMART. Consequently, analysts at firms such as Rosenblatt turned their attention to Palantir Technologies ( PLTR -0.52% ) , believing SMART could become an additional revenue source for the software-as-a-service (SaaS) stock . Palantir did not win the contract, but investors likely would have had trouble benefiting from this new business line -- here's why. Admittedly, Palantir was well positioned to implement a system like SMART. The company's tools could have improved SMART by making air traffic management more efficient and averting potential problems. Nonetheless, despite those attributes, the 12-year, $875 million deal went to a company called Air Space Intelligence. Unfortunately, even if Palantir had won the contract, investors faced one critical obstacle -- the current state of Palantir. The company's stock trades at a P/E ratio of 164, and even its forward P/E reduces the earnings multiple to just 119. When also factoring in a sales multiple of 80 and a price-to-book value ratio of 47, the stock appears priced to perfection by just about every measure.
DYAX Investor Sentiment
Bullish (Long) 43% · Bearish (Short) 57%
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