Cramer said he thinks the Palantir stock is going to touch $200 despite skyrocketing 131% year-to-date.
Jim Cramer on Tuesday called Palantir Technologies Inc. (PLTR) stock “dramatically undervalued” after the company reported its first billion-dollar sales quarter on Monday.
In CNBC’s “Squawk on the Street” segment, Cramer said he thinks the Palantir stock is going to touch $200. Notably, the stock has risen 130% this year and is currently trading near the $172 mark. Retail sentiment around the PLTR stock was in the ‘extremely bullish’ territory on Stocktwits, and it was also the top trending stock on the platform at the time of writing.
Palantir’s shares traded over 8% higher in Tuesday morning trade.
“This company is dramatically undervalued here. It goes to $200. Whether it goes to $200 next week or tomorrow, I don’t know. But it’s going to $200,” said Cramer, who has been a Palantir bull for a long time.
Cramer also said that the Palantir stock should not be held to the conventional valuation metrics. Instead, he proposed a “Rule of 40,” which is the sum of the percentage of revenue growth rate plus adjusted operating margins. Cramer said anything above 40 is a positive, and this metric for Palantir is currently at 94, as the company reported a 48% growth in revenue in the second quarter, while operating margins stood at 46%.
On Monday, Palantir reported its Q2 results, with earnings per share (EPS) of $0.16 on revenue of $1 billion. Fiscal.ai estimated pegged EPS at $0.14, while revenue was expected to come in at $939 million. PLTR stock has surged more than 621% over the past 12 months.
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