Palantir Stock Plummets As Analysts Flag Valuation Risks Despite Q1 Revenue Beat

Palantir Technologies (PLTR) shares fell more than 13% in morning trading on Tuesday, with analysts citing valuation concerns despite a strong first-quarter report.

The company posted adjusted earnings per share of $0.13, meeting analyst expectations, while revenue for the quarter reached $883.86 million, surpassing estimates of $862 million.

CEO Alex Karp said that “Palantir is on fire” and that he’s “very optimistic” about the current setup during Monday's earnings call after the bell.

While several analysts praised the company’s revenue rising 39% year-over-year (YoY), prompting it to raise its full-year forecast to between $3.89 billion and $3.90 billion, others were more cautious, as per notes to investors cited by TheFly.

Mizuho raised its price target to $94 but kept an ‘Underperform’ rating, writing that it is “very difficult to justify the stock's very high multiple,” which it believes already reflects substantial growth expectations. 

RBC maintained its $40 target and ‘Underperform’ rating, citing concerns over Palantir’s product differentiation and long-term growth runway. The brokerage said the risk-reward profile remains skewed given the stock's premium valuation.

Still, some on Wall Street acknowledged the strength of the quarter. Morgan Stanley said the company is “one of the clearest AI beneficiaries,” while Wedbush highlighted “robust beats across the board.” 

They continue to view Palantir as a key player in the AI boom. Much of their optimism is tied to the company’s Artificial Intelligence Platform (AIP), which has seen rising customer interest.

However, even bullish analysts suggested Palantir’s AI leadership is “well known” and “priced in.”

Palantir's stock remains up 43% year-to-date and has surged nearly 350% over the past 12 months. 

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