Strong week for Palantir Technologies (NYSE:PLTR) shareholders doesn't alleviate pain of one-year loss

The nature of investing is that you win some, and you lose some. Anyone who held Palantir Technologies Inc. (NYSE:PLTR) over the last year knows what a loser feels like. The share price has slid 60% in that time. Palantir Technologies hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. But it's up 5.2% in the last week.

On a more encouraging note the company has added US$790m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

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Palantir Technologies isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Palantir Technologies grew its revenue by 28% over the last year. We think that is pretty nice growth. Unfortunately it seems investors wanted more, because the share price is down 60% in that time. It is of course possible that the business will still deliver strong growth, it will just take longer than expected to do it. To our minds it isn't enough to just look at revenue, anyway. Always consider when profits will flow.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. You can see what analysts are predicting for Palantir Technologies in this interactive graph of future profit estimates.

A Different Perspective

Palantir Technologies shareholders are down 60% for the year, even worse than the market loss of 14%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's great to see a nice little 3.5% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Palantir Technologies is showing 1 warning sign in our investment analysis , you should know about...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.