Palantir, a prominent player in the data analytics software sector, has experienced a remarkable surge in its shares, boasting a 36% increase in value this year and an astounding 200% surge over the past 12 months. This surge is largely attributed to the company’s success in deploying sophisticated artificial intelligence (AI) applications, particularly within its US commercial client base.
As investors eagerly anticipate Palantir’s first-quarter financial results, slated for release after the close of trading on Monday, the market awaits fresh insights into the company’s progress with its AI initiatives. The previous quarter’s results were indeed impressive, with Palantir reporting robust performance in its US commercial segment. CEO Alex Karp’s characterization of the performance as “bombastic, baller, incomprehensibly good” in an interview with Barron’s three months ago underscores the magnitude of the achievement. Notably, Palantir’s fourth-quarter commercial revenue reached an impressive $284 million, marking a significant 32% increase, with an astonishing 70% growth recorded in the US commercial business alone. This stellar performance fueled a substantial one-day surge of 30% in Palantir’s stock price.
For the first quarter, Palantir has forecasted revenue to range between $612 million and $616 million, with adjusted income from operations expected to fall within the $196 million to $200 million range. Analysts’ consensus estimates anticipate revenue of $615 million, representing a notable 17% increase, with operating income projected at $198 million and adjusted earnings per share of eight cents.
Market analysts anticipate Palantir to report commercial segment revenue of $292 million, indicating a robust 24% increase, while government segment revenue is expected to reach $322 million, reflecting an 11% uptick.
Looking ahead, Palantir has provided revenue projections for 2024, ranging between $2.652 billion and $2.668 billion, with analysts estimating $2.673 billion—a substantial 20% increase over the previous year. Additionally, the company forecasts adjusted income from operations for the full year to range from $834 million to $850 million. Palantir expects US commercial revenue growth for the year to be at least 40%, with adjusted free cash flow projected to range between $800 million and $1 billion for 2024.
Citi analyst Tyler Radke, who previously held a Sell rating on Palantir shares but recently shifted to a Hold rating, raised his target price on the stock to $23 from $20. Radke anticipates that strength in the company’s Artificial Intelligence Platform (AIP) could offset any weaknesses in the government segment, predicting a potential slight beat in revenue for the first quarter and healthy profitability.
Looking ahead to the June quarter, Street consensus estimates forecast revenue of $643 million, representing a solid 21% increase, with adjusted operating income projected at $201 million and adjusted earnings of eight cents per share.
Overall, Palantir’s upcoming earnings report will provide valuable insights into the company’s performance and the trajectory of its AI initiatives, which will undoubtedly shape investor sentiment in the coming months.
