Palantir shares rise, although analysts expect decline

Key Findings

Palantir shares are rising after its latest results beat Street expectations.
Analysts are concerned that the company may be overvalued, as many maintained a sell or equivalent rating despite the strong quarter.
Deutsche Bank said the company benefits from “a more entrenched retail investor base than anything else we consider.”

Palantir Technologies (PLTR) shares soared on Tuesday after yesterday’s earnings results. comfortably exceed expectations. Some analysts remain wary that the analytics software provider is overvalued.

“There’s no denying that (Palantir) deserves a higher valuation,” Mizuho analysts wrote after the company delivered 30% revenue growth and raised its 2024 guidance. However, they said it was “increasingly difficult to justify” the stock’s valuation.

Mizuho, which has an “underperform” rating on its stock, raised its price target to $37 from $30, which still sends the stock down. year; the average price target tracked by Visible Alpha is approaching $33.

Deutsche Bank analysts raised their target price from $21 to $26. They wrote that Palantir benefits from what they call “a more entrenched following of retail investors relative to everything else we cover.” Palantir trades at about twice the price of the next most expensive bank stock, analysts say.

General manager Alexander Karp said the company was “completely devastated this quarter due to the unrelenting AI demand that won’t slow down.”

The company’s U.S. commercial revenue rose 54% to $179 million during the period, while U.S. government revenue increased 40% to $320 million. Executives cited artificial intelligence-related demand as a driver of this growth.