Palantir Q3 Report On Tap Monday As Stock Trades With Over 140% Gain For Year: Retail Mostly Upbeat

Alex Karp-led data analytics company Palantir Technologies, Inc. ($PLTR) is scheduled to report its third-quarter results after the market closes on Monday.

After a mixed bag of tech earnings, investors look ahead to Palantir’s quarterly report for validation on the artificial intelligence spending momentum.

Q3 Expectations

Analysts, on average, expect Palantir to report third-quarter earnings per share, (EPS) of $0.09 compared to $0.07 a year ago. The bottom-line expectation calls for a sequentially flattish performance.

Revenue may have increased 26.36% year-over-year (YoY) to $705.11 million. Relative to the second quarter, the growth is estimated at roughly 4%. In early August, Palantir guided to revenue of $697 million to $701 million for the quarter and adjusted income from operations of $233 million to $237 million.

Government revenue accounted for roughly 55% of the total revenue in the second quarter, with revenue from commercial customers making up the remainder. 

Palantir’s U.S. revenue was at $437 million in the second quarter, making up about 65.5% of the total. 

Outlook

For 2024, analysts’ look forward to non-GAAP EPS of $0.36 and revenue of $2.76 billion, and this compares to the company’s guidance range of $2.74 billion to $2.75 billion.

Palantir had guided to U.S. commercial revenue of more than $672 million, marking at least 47% growth. It estimates adjusted cash flow of about $800 million to $1 billion. 

The Stock

Palantir shares, which went about a consolidation phase until early August this year, have embarked on a strong rally since then, with the S&P 500 inclusion fueling the upside further. The stock has jumped 144% for the year-to-date period.

In late-October, Mizuho Securities analyst Gregg Moskowitz upped the price target for Palantir shares from $24 to $30, while maintaining the rating at “Underweight,” according to the Fly. The analyst attributed the upward price target adjustment to solid third-quarter software checks, healthy Cybersecurity demand, and encouraging signs of generative AI adoption. Consumption data points were, however, mixed, he said.

The stock’s valuation is stretched and it trades at a forward price-earnings (P/E) ratio of 102.04, according to Yahoo Finance.

A user on the Stocktwits platform looked forward to a beat and the stock scaling $590 psychological resistance following the earnings.

Another said he sees more gains for the stock when Donald Trump assumes office.

However, a bearish user said a $2-$3 dip is likely on Monday and also flagged chatter that suggest more sell-off after the earnings. “I am [a] buyer only following Monday. No buying this upcoming week,” he said.

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Palantir ended Friday’s session up 0.87% at $41.92.

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