Can this software company justify its sky-high valuation?
Palantir Technologies (PLTR) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
Insider stock sales, especially around price peaks, often drive speculation among investors, as such transactions can lead to volatility due to lingering concerns about a company's future outlook.
Palantir is positioned for significant growth across its government and commercial customers. Customer contracts are both expanding and being extended with AIP. My forecast for Q3'24 calls for revenue at $720mm, exceeding guidance, with an adjusted operating margin of $245mm and EPS of $0.09/share. Despite high valuation, the addition to the S&P 500 and strong momentum suggest Palantir shares can sustain higher valuations.
Palantir shares have surged more than 150% so far this year.
The artificial intelligence company is gaining traction with enterprises as its products facilitate competitive advantages.
The stock Jones is buying could excel in the near term and down the road.
The latest trading day saw Palantir Technologies Inc. (PLTR) settling at $44.97, representing a +0.25% change from its previous close.
Palantir's Q3 2024 revenue is expected to fall between $697 million and $701 million, indicating roughly 26% year-over-year growth. Free cash flow margins remain solid, and capital expenditures are low due to Palantir's software-focused business model. Palantir's continued expansion in the commercial sector, especially in healthcare and finance, is crucial for sustaining revenue growth.
Palantir is helping companies incorporate AI into their businesses — and one analyst says it's succeeded “more than any company (not named Nvidia).”
Palantir Technologies (PLTR) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
I am upgrading Palantir's stock to a "buy" as I had previously underestimated profitability expansion potential, despite high valuation and expected volatility. I believe that Palantir will likely beat its Q3 FY24 revenue and earnings target, driven by strong AIP demand and strategic government contracts keeping the trend of revenue acceleration alive. While Palantir's forward revenue multiple is high compared to peers, despite similar revenue growth rates into FY26, its potential for profitability expansion could justify a price target of $61.