Palantir’s Upbeat Q1 Earnings Fail to Convince Wall Street

311 Analyst Ratings for March 7th, 2024

Palantir (PLTR:NYE), the data analytics company, recently announced impressive first-quarter earnings and highlighted the strong demand for its artificial intelligence platform (AIP). While investors responded positively to the company’s market performance and its commitment to profitability, Wall Street remains skeptical about Palantir’s future prospects. Concerns regarding revenue growth slowdown and increased competition have led analysts to maintain a cautious stance on the Palantir stock, despite the company’s optimistic outlook.

 

Wall Street Remains Cautious:

Despite achieving positive GAAP profit for the second consecutive quarter in Q1 2023, Palantir faces skepticism from most Wall Street analysts.

Following the earnings release, Louie DiPalma, an analyst from William Blair, maintained a Sell rating on PLTR, highlighting the company’s Q2 revenue growth guidance of 12% (at the midpoint) as the slowest growth rate since going public. DiPalma expressed concerns about the potential decline in revenue growth due to competition and the need to renew vital government contracts.

RBC Capital analyst Rishi Jaluria also maintained a Sell rating and a price target of $5, pointing out the decline in key indicators like remaining performance obligation (RPO), current RPO, net revenue retention (NRR), and total deal value (TDV). Jaluria raised doubts about Palantir’s claim to be an artificial intelligence company, suggesting it is primarily a data processing platform with significant professional services.

On the other hand, Jefferies analyst Brent Thill increased his price target to $10 from $8.50 and maintained a Hold rating. Thill acknowledged the rally in Palantir stock due to better-than-feared Q1 performance but highlighted investors’ continued skepticism due to the slowdown in business fundamentals.

PLTR Ratings by Stock Target Advisor

Mixed Recommendations and Price Targets:

Wall Street’s consensus analyst rating for Palantir is an Under-perform. The average price target of $9.72 implies a potential downside of nearly 34%. Despite this caution from analysts, Palantir stock shares have seen a remarkable 129% year-to-date increase, indicating a positive hedge fund confidence signal.

PLTR Ratings by Stock Target Advisor

The Takeaway:

Palantir’s impressive Q1 earnings and AI growth plans have not convinced Wall Street, as analysts express concerns about the company’s revenue growth slowdown and increased competition in the government business.

While some analysts acknowledge Palantir’s commitment to profitability and positive GAAP operating income, skepticism remains due to the company’s overall business fundamentals. As Palantir moves forward, investors and analysts will closely monitor its ability to overcome these challenges and deliver sustained growth.

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