The facts discussed here and much other information on Zacks.com might help determine whether or not it’s worthwhile paying attention to the market buzz about Palantir Technologies Inc. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term. Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016. Palantir was named one of CNBC’s Disruptor 50 companies seven times, most recently ranking No. 34 in 2019.
Notably, the company’s commercial business, which had been a mixed performer over the last year, saw revenue grow by about 28% year-over-year, as sales to customers in the U.S. soared. This marks an increase from a year-over-year growth rate of about 19% during Q1. Although Palantir’s bread-and-butter government revenue actually grew much faster at 66% year-over-year, driven by new deals with the U.S, investors typically pay a lot more attention to the commercial side of Palantir’s business. This is because the commercial business is more transparent compared to the government vertical, and valuation multiples for commercial businesses are also usually higher than for government contractors.
- In the final step we divide the equity value by the number of shares outstanding.
- During the same period in 2020, Palantir had $2 billion of cash and nearly $200 million of debt on the balance sheet.
- It is without question that Palantir stock is expensive, therefore many investors are questioning its current valuation.
- In comparison, Snowflake saw Revenue grow 173% from $97 million in FY’19 to about $265 million in FY’20, although the growth rate is likely to slow down to roughly 110% over the current fiscal, based on consensus figures.
The consensus among Wall Street equities research analysts is that investors should “reduce” PLTR shares. For comparison, C3.ai is anticipated to clock just 15% revenue growth in the current fiscal year to $306 million. The good part is that analysts are anticipating an uptick in the company’s growth from the next fiscal year. Palantir Technologies’ full-year 2023 revenue outlook of $2.22 billion suggests that its top line is on track to increase 16.5% this year. But for a stock that’s trading at 17 times sales, investors may be having second thoughts about whether Palantir is worth investing in right now, given the rich valuation. The terrific gains that these stocks delivered lately may seem a tad surprising at first, considering the pace at which Palantir and C3.ai are growing.
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The AI stock has been on a roll this year. Can the good times continue?
Moreover, the company’s international operations, which remained muted over Q2, could see a recovery going forward, as economies begin to open up with spending by businesses poised to look up. 14 Wall Street equities https://bigbostrade.com/ research analysts have issued “buy,” “hold,” and “sell” ratings for Palantir Technologies in the last twelve months. There are currently 6 sell ratings, 5 hold ratings and 3 buy ratings for the stock.
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The partnership will focus on cataloging and assessing damage to infrastructure, utilizing software to streamline reconstruction, and bolstering electronic public services. Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets. Their Gotham platform is used for counterterrorism in the United States Intelligence Agency (USIC) and the United States Department of Defense.
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C3.ai used to enjoy greater revenue visibility and pipeline when it was following a subscription-based model, which allowed it to lock customers into long-term contracts. However, the company felt that such a model raised the entry barrier for new customers, so it switched to a pay-as-you-go model just over a year ago. What’s more, consensus estimates project Palantir’s earnings to increase at an annual rate of 85% for the next five years, suggesting that it could indeed become a top AI stock in the long run.
So is Palantir stock likely to decline further in the coming weeks and months or is a rally looking more likely? Per the Trefis machine learning engine which analyzes historical stock price movements, PLTR stock only has a 36% chance of a rise over the next month (21 trading days). Palantir has been investing in creating a product that’s easier to sell and deploy.
But in the nearly two decades since its founding, its offerings have become much wider. Part of the reason for the wild ride might be that it’s really difficult to discern how this technology is applied. Our experts picked 7 Zacks Rank #1 Strong Buy stocks with the best chance to skyrocket within the next days.
Upgrade to MarketBeat All Access to add more stocks to your watchlist. 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 money management forex 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.
The company topped consensus revenue estimates three times over this period. The consensus earnings estimate of $0.25 for the current fiscal year indicates a year-over-year change of +316.7%. The challenge for Palantir is convincing investors that it’s more of a high-growth tech company than a low-margin consulting services firm. The company has only 125 customers, spending on average $5.6 million in 2019. The company is allowing existing shareholders to sell up to one-fifth of their holdings now while hanging onto the rest until the lockup period expires after it reports results for the year ending Dec. 31. Palantir said 475.8 million shares will be available for sale on the first day of trading.
Palantir Technologies Inc. stock falls Tuesday, underperforms market
That won’t be surprising as Palantir is considered to be the leader in the AI software platforms market, which is expected to grow rapidly in the long run. However, the business performance is only one component of the buy case. Based on adjusted earnings, the stock is trading at a price-to-earnings ratio of 69, which is expensive, especially for a company that’s only growing revenue by high-teen percentages.