Palantir: down on unprecedented demand


Palantir (NYSE: PLTR) Shares have risen for a variety of reasons that add up to 1 thing: positive GAAP cash flow and expectations to continue positive cash flow through the end of the year. The news isn’t surprising given the company’s status as a cloud-based cyber-security data-management firm, but there was a 25% pop in share prices. based on the results obtained from Microsoft (NASDAQ: MSFT), Datadog (NASDAQ: DDOG) And Others in the Cloud IndustryThat’s good news for Palantir and the group, which has been beaten up over the past year. The takeaway is that Palantir stock is going down, and analysts with all eyes forecast higher share prices ahead.

Results powered by Palantir AI

Palantir results are positive in every sense. The company reported revenue of $525.19 million, beating the consensus by nearly 400 basis points. Profit was driven by strength across all categories, led by strength in the Americas. US sales increased by 23%, government spending by 20% (22% in the US) and consumer spending by 15% (26% in the US), compared to lower rates globally.

“The engagement with and demand for our new Artificial Intelligence Platform (AIP) is without precedent,” wrote Alexander C. Karp, co-founder and CEO of Palantir Technologies Inc.

Margin news made the market move so fast. The company reported its second consecutive quarter of positive GAAP net income And is forecasting a first quarter of positive GAAP operating income and profitability by the end of the year. This resulted in an adjusted operating margin of 24% and 36% growth in cash from ops and free cash flow.

Looking to the future, the company expects the second quarter to be slightly softer than analysts’ expectations, but to pick up pace through the end of the year. The fiscal year revenue target brackets the consensus figure with the midpoint above analysts’ targets. Because subscriber growth grew 41% and 7% sequentially to outpace revenue growth by a wide margin, there’s a chance that guidance is cautious. Deeper access to services, along with faster adoption of AI-powered cloud services and security features, could be the ticket to improved performance.

Analysts’ reaction is mixed

are analysts generally optimistic Regarding Palantir’s Q1 results and guidance, but there’s a note of caution within the group. At least 2 firms with Sell or Underperform ratings have commented that the results are not that impressive, and range-bound conditions are likely to continue. This is offset by bullish commentary from Bank of America, which has a buy rating and price target of $13, and 2 price target increases from Jefferies and Deutsche Bank. The takeaway is that Palantir is assigned a firm hold status, which has held steady over the past year, and the consensus price target, which is now below price action, is still running lower than it has been over the past year. However, this trend may be coming to an end.

Palantir stock is trading at a significant level that could cap gains. That level is the opening day low for Trains near $8.90. Until the market moves above that level, there is a risk that limit positions will remain at the current low levels. However, Q2 results could bring about a change in conviction for this market and push the price back above that critical level. In that scenario, a sustainable rally could form.

The views and opinions expressed here are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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