Palantir Technologies (NYSE:PLTR) saw a dip in its stock price following the release of its Q1 results. However, this presents an opportunity for investors. Despite the downturn, PLTR stock has remained stagnant for the past three months and is currently at the lower end of its trading range.
As of today, PLTR stock is trading at $21.65, marking a decrease of over 14% from the previous close. This falls well below the three-month average price of approximately $23.00.
One potential strategy to capitalize on this downturn is to engage in short out-of-the-money (OTM) puts as a disciplined buying method. This involves selling put options at strike prices below the current spot price, allowing investors to benefit from immediate income.
This approach was previously discussed in a Barchart article on April 7 titled “Palantir Stock Is Treading Water – Good for Short-Put Trades That Yield 2.0% in 3 Weeks.” The article outlines a price target for PLTR stock and provides guidance on selling short OTM puts for additional income and as a method of entering the market at a lower price.
Despite the recent stock decline, Palantir reported strong Q1 results, with a 21% increase in revenue to $634 million and a record quarterly net income of $105.5 million. Although adjusted free cash flow (FCF) margins were lower compared to the previous quarter, the company remains on a growth trajectory, with management forecasting significant revenue growth for the year ahead.
Sell-side analysts also project substantial revenue increases, with estimates of $2.7 billion in revenue for the current year and $3.24 billion for 2025. This growth potential suggests that PLTR stock is undervalued at its current price, making it an attractive opportunity for investors.
In light of this, selling short OTM puts can serve as both a source of income and a method of acquiring PLTR stock at a potentially lower price. By taking advantage of the current market conditions, investors can position themselves for long-term success with Palantir Technologies.
Featured Image: Megapixl
Author Stephanie Bédard-Châteauneuf 
