Key Takeaways
- UBS upgraded Palantir $PLTR to Buy from Neutral, setting a $180 price target after shares dropped roughly 35% from recent highs
- Rosenblatt initiated coverage with a Buy rating and $150 price target, calling the current price an “attractive entry point”
- Q4 earnings beat expectations: EPS of $0.25 versus $0.23 expected, revenue of $1.41B versus $1.34B estimated, marking 70% year-over-year growth
- Insider selling totaled over 1 million shares worth approximately $142M in the latest quarter, bringing insider ownership down to about 9.23%
- Analyst consensus rating is “Moderate Buy” with average price target of $191.05, implying roughly 38.9% potential upside
Palantir $PLTR shares climbed 1.3% on Thursday to $135.94 after UBS upgraded the stock from Neutral to Buy and assigned a $180 price target.
Palantir Technologies Inc., PLTR
UBS analyst Karl Keirstead advised investors to capitalize on the buying opportunity presented by the stock’s approximately 35% decline from its recent highs. He described Palantir as a “premier growth story” in the software industry and emphasized its strategic positioning “at the nexus of the two most powerful spending trends — AI and Data.”
Keirstead reported that proprietary industry research indicated a “very strong demand backdrop,” suggesting robust customer engagement and adoption rates. UBS projects revenue growth of approximately 70% through 2026, with margins expected to stay in the mid-50% range.
The stock hit an intraday high of $137.51. Volume reached about 44.5 million shares, roughly 13% below the average daily trading volume.
Rosenblatt Joins the Bullish Camp
Also on Thursday, Rosenblatt analyst John McPeake initiated coverage on the stock with a Buy rating and a $150 price target.
McPeake described Palantir as a “market-disrupting, uniquely positioned AI software leader.” He pointed to the stock’s 33% decline from its October highs as creating an attractive entry opportunity.
He expects the company to maintain strong growth rates while benefiting from operating leverage as the business scales. The company currently boasts an 82% gross profit margin, with revenue growing 56% over the past twelve months.
These upgrades add to recent bullish calls from Mizuho, Freedom Capital, and Robert W. Baird. The Street’s consensus rating is “Moderate Buy,” consisting of 14 Buy ratings, 4 Hold ratings, and 2 Sell ratings, with an average price target of $191.05.
Impressive Q4 Results Overshadowed by Valuation Concerns
Palantir reported fourth quarter earnings on February 2nd. The company posted earnings per share of $0.25, beating the $0.23 consensus estimate. Revenue reached $1.41 billion, topping the $1.34 billion Wall Street projection and representing 70% year-over-year growth.
Return on equity came in at 23.81% with a net margin of 36.31%. Analysts forecast full-year EPS of $0.31.
Despite strong fundamentals, the stock trades at a P/E ratio near 216. This lofty valuation multiple leaves little room for error if the company faces any operational hiccups.
The 50-day moving average currently sits at $161.79, while the 200-day moving average is at $170.49. The company’s market cap stands at $324 billion.
Institutional investors and hedge funds own 45.65% of the company’s shares. Several smaller investment firms have increased their positions in recent quarters.
A red flag: company insiders sold more than 1.05 million shares worth about $142 million in the most recent quarter. Insider Ryan Taylor sold 19,988 shares on February 20th at $133.72 each. Insider Stephen Cohen dumped 327,088 shares the same day, reducing his holdings by 99.82%.
Insider ownership now stands at 9.23%.
On a positive note, DISA granted Palantir’s PFCS Forward provisional Impact Level 6 authorization, allowing deployment in the most secure Department of Defense cloud environments. Separately, Rackspace was named a dedicated implementation partner for Palantir’s Foundry and AIP platforms.
PLTR closed Thursday’s session at $135.94.
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