PLTR Stock: Is Palantir a Buy, Hold or Sell at Current Levels?

12 Wall Street research analysts have issued 12-month price targets for Palantir Technologies’ shares. On average, they anticipate the company’s stock price to reach $18.21 in the next year. View analysts price targets for PLTR or view top-rated stocks among Wall Street analysts. One concern for investors is that while Palantir has been growing, its growth rate may not be significant enough. In the fourth quarter of 2023, which was for the last three months of the year, the company’s revenue grew 20% year over year to $608 million.

1. Adjusted income from operations soared to $209 million, representing a robust 34% margin.
2. The company is scheduled to release its next quarterly earnings announcement on Monday, May 13th 2024.
3. For the U.S. commercial segment, upward growth of at least 40% is expected, with adjusted income from operations pegged at $834 million to 850 million.
4. Last quarter, its sales totaled $284 million and rose by 32% year over year, and it was up 13% on a quarter-over-quarter basis.

Commercial and government clients included notable names such as Airbus, Ferrari, and the United Kingdom’s NHS. Government revenue accounts for a big slice of Palantir’s top line, and this could offer proof to investors that there’s still plenty of growth potential in that area of its business as well when it comes to AI. The deal is worth $178.4 million and involves the development of the Army’s Tactical Intelligence Targeting Access Node (Titan), which utilizes AI and machine https://www.topforexnews.org/news/european-stock-futures-lower-euro/ learning. Titan’s goal is, «to provide actionable targeting information for enhanced mission command and long range precision fires.» Investors who bought $1,000 worth of Palantir’s shares at the IPO in September 2020 would now be looking at an investment worth $2,488. This initiative is not just a mere contract, but a significant leap toward redefining tactical ground stations by integrating terrestrial and space sensor data for precision targeting and battlefield planning.

No wonder so many in the investment community are optimistic about 2024. We at StockStory remain cautious, as following the crowd can lead to adverse outcomes. During times like this, it’s best to own high-quality, cash-flowing companies that can weather the ups and downs of the market. During the quarter, commercial revenue exhibited impressive strength, growing 32% https://www.forex-world.net/currency-pairs/gbp-nok/ year over year to $284 million, while government revenue maintained steady growth at 11%, totaling $324 million. Thus, I would rate PLTR stock hold for now and suggest that investors interested in this company add it to their watch lists and monitor for big price movements. After all, an investor’s entry point will determine their rate of return for the long term.

Financial Strength

There are currently 4 sell ratings, 5 hold ratings and 3 buy ratings for the stock. The consensus among Wall Street research analysts is that investors should «reduce» PLTR shares. Palantir’s commercial businesses, meanwhile, has been growing at a much faster rate. Last quarter, its sales totaled $284 million and rose by 32% year over year, and it was up 13% on a quarter-over-quarter basis. The company has seen strong demand for its AI platform from businesses and that has been leading to a surge in revenue on the commercial side. If this impressive pace continues, it may only be a matter of time before the commercial business generates the majority of revenue for the company.

Looking ahead to the first quarter of 2024, management anticipates revenue to hover around $612 million to $616 million, accompanied by an expected adjusted income from operations ranging from $196 million to $200 million. Commercial revenue played a pivotal role, contributing significantly with a total of $1 billion and an impressive 20% growth rate. The U.S. commercial segment exhibited remarkable strength, surging 36% to $457 million.

Palantir’s shares, known for volatility, had 48 significant moves exceeding 5% in the past year. Today’s move suggests the market finds the news meaningful without fundamentally altering its perception. The recent significant move, 18 days ago, followed an impressive earnings report. Third-quarter results surpassed revenue and EPS estimates, with improved gross margin and positive free cash flow. This new deal did help give the stock a boost but it’s not significant enough of a development to suggest this will be a catalyst that helps Palantir’s stock soar higher. Palantir does have a lot of long-term potential but its growth rate may not be high enough to justify its steep valuation.

Palantir and MetaConstellation

We’d like to share more about how we work and what drives our day-to-day business. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data. Lastly, it further solidifies its partnership with the Army and leads a team of innovative partners toward pioneering the next generation of defense capabilities.

Palantir Technologies Inc.

Palantir Apollo is an operating system designed to give continuous delivery and deployment of safe, secure Internet access across all operating environments. The system is 1 of 5 recognized by the Department of Defense as a Mission Critical National Security System and used by businesses and organizations for autonomous software deployment. Among its advantages, the system can speed up the development of new software by as much as 50% simply by securing access to sensitive information and networks. For Palantir, the big takeaway is not just the financial payout from the deal but, perhaps more importantly, the proof that its AI platform is winning over customers. In the press release announcing the deal, Palantir says this is the first «AI-defined vehicle» for the Army.

Therefore, the transition to phase 3, underscored by the development of 10 TITAN prototypes, reflects a significant endorsement of Palantir’s capabilities in delivering AI-enabled solutions to the frontlines. Palantir’s MetaConstellation leverages satellite networks for decision-making on Earth, integrating with various sensors and AI models globally. Despite its 2020 IPO volatility, Palantir’s stock, PLTR, recently broke out with a second-stage cup pattern and surpassed a 20.24 buy point. After a brief touch on Wednesday, it gained over 3% on Friday and continued to rise on Monday, entering a new buy zone with strong volume.

The goal is to generate alpha, or a competitive advantage, for its clients so they can succeed in a rapidly changing environment. Originally intended as a tool for the Federal Government, the company has since expanded to serve state and local governments as well as private corporations. The company’s name is based on J.R.R. Tolkien’s Lord of the Rings trilogy.

Palantir Analyst Data

That said, I remain cautious of this high-potential company because we haven’t seen an elongated track record when it comes to AI’s impact on companies’ bottom lines. If this trend fizzles out, plenty of downsides could materialize, leaving investors putting money in today holding the bag. MarketBeat just released its list of 10 cheap stocks that have been overlooked by the market and may be seriously undervalued.

And on a quarter-over-quarter basis, it only rose by 5% to $324 million. We are raising our fair value estimate for narrow-moat Palantir to $16 from $15 as we incorporate the financial impact of the firm winning the 24-month, $178 million U.S. Along with the near-term uplift as the contract value flows through Palantir’s financials, we also see this contract award as a potential long-term value driver for the business.

Also, its revenue, billings, and free cash flow exceeded Wall Street’s expectations in the quarter, and its gross margin improved. Notably, the US commercial business significantly contributed to the solid performance during the quarter, as revenue in the segment grew 70% year on year and 12% sequentially. Looking ahead, the company expects the US commercial business to grow at least 40% in 2024. A minor negative was that revenue guidance for the next quarter missed analysts’ expectations. Beyond its strategic military engagements, Palantir’s financial performance narrates a story of resilience and strategic growth.

For the U.S. commercial segment, upward growth of at least 40% is expected, with adjusted income from operations pegged at $834 million to 850 million. This, yet again, spotlights the strong momentum in revenue and operational efficiencies at Palantir. Palantir reaching a deal with thematic investment strategies and etfs by ark invest the Army on a new AI-powered deal is great news for the business. But given the stock’s expensive valuation, investors have arguably already been paying for that growth. At 27 times revenue and nearly 80 times expected future earnings, the stock comes priced at a huge premium.

His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective. The company raised full-year guidance, exceeding Wall Street’s expectations, and is now eligible for inclusion in the S&P 500, potentially increasing demand for the stock. Palantir Technologies updated its FY 2024 earnings guidance on Monday, February, 5th.