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Palantir Technologies (PLTR) is an artificial intelligence (AI) company that builds and deploys software to aid in countering terrorism, stopping crime, and helping governments and private enterprises sort through vast quantities of data. Its offerings include Palantir Gotham, Palantir Apollo, and Palantir Foundry.
The company has operations spread across North America, Europe, the Middle East, and Asia, with its base in Palo Alto, California.
With a valuation of $179.82 billion, PLTR stock had a breakout year. Shares have gained 352% in the year to date, and the stock is trading close to its 52-week high above $79.
The Next Oracle?
Wedbush analyst Dan Ives maintained his “Outperform” rating on Palantir with a target of $75, signaling slight downside of about 4% from the market price. Ives expects corporate spending, particularly on AI, to increase in 2025. As part of this, he claims that Palantir is in a prime position to expand its pipeline, and drew comparisons between the company and legendary football player Lionel Messi, ultimately labeling Palantir as the “Messi of AI.”
The analyst believes Palantir addresses critical issues across industries and boosts data-driven decision-making using artificial intelligence and machine learning solutions. Palantir has been a big voice in the AI revolution, as its tools have been popular with government organizations and private enterprises. Ives said that improvements in its generative AI tools will be a major growth factor in the next 12 to 18 months for its U.S. Commercial business.
Additionally, Ives also believes Palantir to have a real shot at becoming the next Oracle (ORCL) in the next decade with AIP, or its Artificial Intelligence Platform, taking the lead.
Palantir’s Third-Quarter Results
Palantir reported its previous Q3 results at the start of November, and the company outperformed estimates while seeing a 23% jump on the day. Palantir reported revenue of $725.5 million, a 30% rise year-over-year that beat the analyst estimate of $703.7 million. Adjusted earnings during the quarter reached $0.10 per share, again beating analysts’ $0.09-per-share estimates.
On the margins end, its gross margin stayed the same as last year at 79.8%, the operating margin doubled from 7.2% to 15.6% and the EBITDA margin also increased from 30.8% last year to 39.1% this year. Billings during the quarter totaled $676.9 million, up 33.8% YOY, indicating a solid sales pipeline with robust demand.
Looking ahead, Palantir also beat estimates for its Q4 revenue. Analysts guided for $744 million at the midpoint, whereas Palantir has offered up a range from $767 million to $771 million. That puts the midpoint of its guidance at $769 million.
Analyst Ratings on PLTR
Despite the excitement, analysts are cautious on Palantir going into the new year. Analysts have a consensus “Hold” rating on PLTR with a mean price target that is well below its current trading price.
The stock is well covered by 17 analysts with 2 “Strong Buy” ratings, 8 “Hold” ratings, 2 “Moderate Sell” ratings, and 5 “Strong Sell” ratings.
