Palantir Technologies Inc. (NYSE:PLTR) Released Earnings Last Week And Analysts Lifted Their Price Target To US$24.16

Palantir Technologies Inc. (NYSE:PLTR) Released Earnings Last Week And Analysts Lifted Their Price Target To US$24.16

It’s been a pretty great week for Palantir Technologies Inc. (NYSE:PLTR) shareholders, with its shares surging 14% to US$24.90 in the week since its latest quarterly results. The business exceeded revenue expectations with sales of US$376m coming in 4.0% ahead of forecasts. Statutory losses were US$0.07 a share, in line with what the analysts predicted. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Palantir Technologies

Taking into account the latest results, the current consensus from Palantir Technologies' ten analysts is for revenues of US$1.50b in 2021, which would reflect a meaningful 13% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 80% to US$0.16. Before this latest report, the consensus had been expecting revenues of US$1.48b and US$0.26 per share in losses. Although the revenue estimates have not really changed Palantir Technologies’future looks a little different to the past, with a very promising decrease in the loss per share forecasts in particular.

These new estimates led to the consensus price target rising 11% to US$24.16, with lower forecast losses suggesting things could be looking up for Palantir Technologies. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Palantir Technologies at US$30.00 per share, while the most bearish prices it at US$17.00. This shows there is still a bit of diversity in estimates, but analysts don’t appear to be totally split on the stock as though it might be a success or failure situation.

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Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Palantir Technologies' revenue growth is expected to slow, with the forecast 27% annualised growth rate until the end of 2021 being well below the historical 47% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 14% per year. Even after the forecast slowdown in growth, it seems obvious that Palantir Technologies is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn’t be too quick to come to a conclusion on Palantir Technologies. Long-term earnings power is much more important than next year’s profits. At Simply Wall St, we have a full range of analyst estimates for Palantir Technologies going out to 2023, and you can see them free on our platform here..

It is also worth noting that we have found 2 warning signs for Palantir Technologies that you need to take into consideration.

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.

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Palantir Technologies Stock Price and Forecast: Why is Palantir down today?

Palantir shares fall in Monday’s premarket session.

PLTR remains strong after knockout results last week.

Shares in Palantir have broken out of the trend channel.

Palantir shares are a bit weaker in Monday’s premarket but nothing to get too concerned about for bulls. Global equity markets are under a sea of red this morning as Chinese data was weak leading to fears over Delta and a global economic slowdown. Palantir shares are also due to take a breather following a stellar performance last week with Thursday seeing the stock surge after results. PLTR stock closed up over 11% last Thursday and consolidated this gain on Friday with a steady close at $24.90 for a tiny gain on the day.

Palantir’s earnings were not way ahead, but it was a solid beat. But it was the growth rates that really impressed investors as revenue ticked up by 50% on the quarter and the growth in new customers was also impressive. Topping it all off was the fact that PLTR upgraded its guidance for Q3 revenue and doubled its free cash flow guidance from $150 million to $300 million. Yes, doubled! No wonder investors pushed the stock higher on Thursday. Palantir has a pretty decent following from the retail community and was an original WallStreetBets favourite back in January, but Palantir stock also has some savvy institutional investors. The Wall Street analyst community will have liked these earnings, and upgrades are sure to follow. On Friday alone, Jefferies, Morgan Stanley, Citigroup and RBC all raised their price targets for PLTR.

Palantir key statistics

Market Cap $46.7 billion Enterprise Value $40.49 billion Price/Earnings (P/E) 135 Price/Book 26 Price/Sales 36 Gross Margin 0.7 Net Margin -1.02 EBITDA 52 week low $45 52 week high $8.90 Average Wall Street rating and price target HOLD $24.61

Palantir stock forecast

The steady uptrend channel going back to July has been broken out of, smashed out of actually, last Thursday in a strong move. We can see clearly from the chart that Palantir stock is now steady right at the point of control since the stock was first listed. This is at $24.90. The point of control is the price with the highest volume. Pushing higher may take time and effort and a phase of consolidation is to be expected. The first resistance to target is $27.49 which is the high from June 28. Once PLTR breaks above that it is game on as the volume drops off sharply and any move can increase in speed. Options players should note this should mean an increase in volatility making option prices jump.

A retracement from such a powerful move is not unexpected nore a case for concern so long as $23.49 holds. This is also close to the 9-day moving average. Watch for the Moving Average Convergence Divergence (MACD) to break the long-term downtrend line as this could be a signal for a fresh push higher, but it is likely a while yet before it happens.

Palantir Crushes Earnings – Is $PLTR Still a Buy Now?

Palantir (NYSE:PLTR) reported earnings this morning, and it delivered strong numbers and surprise beats across the board. The stock has been controversial since its direct listing in October 2020. I purchased this stock in the $9 range, and it ripped to $45 before plummeting back to the low $20s. I recently did a writeup and video on Palantir and said I thought the stock was an opportunity in the low $20s and a no-brainer below $20. Unfortunately, the stock did not fall below $20, and earnings has the stock up over 14% as I’m writing this.

Palantir has a cult following, and it reminds me somewhat of Tesla (NASDAQ:TSLA). Alex Karp, Palantir’s CEO, is a quirky and intelligent guy, much like Tesla’s Elon Musk. This is not necessarily a reason to buy the stock, but it is an important consideration for potential shareholders. Stocks like Tesla and Palantir often trade at unique valuations and carry more volatility. I expect this trend to continue, but if retail investors continue to own shares in their long-term investment portfolios, it could accelerate the share price over time, much as with Tesla. A premium is often paid for these “cult stocks.” I am long Palantir, but I do understand the risks.

Another thing I think is interesting about Palantir is its hybrid crossover into cybersecurity. Of course, the company is not typically thrown into the cybersecurity stock bucket. After all, Palantir is a big data analytics software company that helps government agencies and companies manage and analyze data. However, with the increased hacks and high-profile security breaches, businesses are faced with complex challenges that require sophisticated solutions. Palantir offers highly secure data compared to most competitors. It started as a company laser-focused on government-related clients, so its solutions were built with security as the backbone. Commercial-focused vendors cannot say the same, and this provides a competitive advantage for Palantir. In my opinion, commercial clients are the key to Palantir’s long-term growth, so this is an important fact to consider when you’re evaluating the stock as a potential investment.

Here are the Q2 2021 earnings highlights from Palantir’s press release:

Total revenue grew 49% year over year to $376 million

US commercial revenue grew 90% year over year

Palantir closed 62 deals of $1 million or more, of which:

30 deals are $5 million or more

21 deals are $10 million or more

20 net new customers were added in Q2 2021, total customers were up 13% quarter over quarter

Commercial customer count increased 32% quarter over quarter

Cash flow from operations of $23 million, representing a 6% margin

Adjusted free cash flow of $50 million, representing a 13% margin

GAAP net loss per share, diluted, of -$0.07

Adjusted earnings per share, diluted, of $0.04

In the below video, I break down Palantir’s earnings report and offer my opinions on the company and its stock.

*Stock prices used in the below video were during premarket trading of August 12, 2021. The video was published on August 12, 2021.