TLDR:
- Palantir will report Q1 earnings on May 6, 2025, with analysts expecting 35.9% revenue growth to $862.3 million
- The company beat revenue expectations by 6.8% last quarter, reporting $827.5 million (up 36% year-on-year)
- Cathie Wood’s ARK Investment recently sold $30.7 million worth of Palantir stock ahead of earnings
- Analysts project EPS of $0.13, a 62.5% increase from the prior year
- Wall Street maintains a Hold consensus with an average price target of $89.17, suggesting a potential 28.25% downside from current levels
Palantir, the data-mining and analytics company, is set to release its first-quarter earnings report on May 6, after market hours. The stock has gained over 64% year-to-date, but faces mixed signals as key investor Cathie Wood reduces her position.
Analysts expect Palantir to report revenue of $862.3 million, representing a 35.9% year-on-year growth. This would mark an improvement from the 20.8% increase recorded in the same quarter last year.
The company demonstrated strong performance last quarter, beating revenue expectations by 6.8% with $827.5 million in revenue. This represented a 36% year-on-year increase, along with impressive beats on both billings and EBITDA estimates.
Wall Street expects adjusted earnings to come in at $0.13 per share for Q1, which would represent a 62.5% increase compared to the same period last year.
Despite these positive projections, some prominent investors appear to be taking profits. Cathie Wood’s ARK Investment Management has been trimming its Palantir holdings ahead of the earnings announcement.
Wood’s Portfolio Reshuffling
On May 2, ARK Invest sold $30.7 million worth of Palantir stock. This followed a smaller $2.65 million sale of PLTR shares on May 1.
These sales are notable because ARK has historically maintained Palantir positions across multiple ETFs, reflecting Wood’s belief in the company’s data analytics and AI capabilities.
The timing suggests profit-taking after Palantir’s substantial year-to-date gains, which have been driven partly by new defense contracts and expanding commercial applications.
While reducing Palantir exposure, ARK has increased positions in other tech and healthcare companies. This indicates a shift in capital allocation toward areas Wood believes may offer faster growth in the near term.
ARK’s recent purchases include 369,016 shares of Roku worth $24.8 million, despite increasing competition in the streaming market. The firm also invested $20.5 million in Guardant Health, an oncology-focused biotech company, and $6.1 million in Airbnb.
Analyst Sentiment Remains Cautious
Wall Street analysts maintain a Hold consensus rating on Palantir stock, based on two Buys, eight Holds, and three Sells assigned in the past three months.
The average price target stands at $89.17, suggesting potential downside of 28.25% from current levels. This indicates a gap between market enthusiasm and analyst caution regarding Palantir’s valuation.
RBC Capital analyst Rishi Jaluria recently reiterated a Sell rating on PLTR with a price target of $40, implying a dramatic 67.8% downside potential from current prices.
Palantir’s historical performance against analyst expectations has been mixed. The company has missed Wall Street’s revenue estimates twice over the last two years.
For context, peers in the data and analytics software segment have recently reported strong Q1 results. Commvault Systems delivered 23.2% revenue growth, beating expectations by 4.8%, while Confluent reported 24.8% growth, exceeding estimates by 2.6%.
Despite the mixed analyst outlook, investor sentiment in the data and analytics software segment has been positive, with share prices up an average of 15.5% over the last month. Palantir has outperformed this benchmark with a 60% gain during the same period.
As Palantir prepares to report earnings, investors will be watching closely to see if the company can justify its current valuation with continued strong growth in both commercial and government sectors.
The stock closed at $124.55 in the most recent trading session, well above the average analyst price target of $87.05.
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