Shares of Palantir Technologies (NASDAQ:PLTR) lost 2.50% over the past five trading sessions after losing 12.16% the five prior. This year, the stock is up more than 117%, and since its October 2022 IPO, PLTR has surged an eye-catching 1,677.72%. However, since hitting their all-time high on Nov. 3, shares of Palantir have lost more than 21%.
When the company reported Q3 earnings on Nov. 3, it beat on the top and bottom lines with EPS of 21 cents versus 17 cents expected, and revenue of $1.18 billion versus $1.09 billion expected. Palantir issued strong guidance, attributing growth to adoption of its AI software platform. Meanwhile, it announced that government sales — which have been essential to Palantir’s rise — grew 52% from the same quarter a year ago.
In September, it was reported that the company agreed to a £1.5 billion defense deal with the U.K. That comes not he back of an announcement in early August that the U.S. Army is consolidating 75 contracts into a single 10-year arrangement with Palantir valued at $10 billion. However, the so-called smart money have been selling the stock in flurries lately, leaving Palantir’s institutional ownership at just 54.69%. JPMorgan, for example, recently reduced its position in PLTR by more than 32%, while T. Rowe Price reduced its position by nearly 24%.
While the stock’s forward P/E ratio of 161.29 can be concerning, Palantir’s federal contracts and aerospace ties are expected to continue fueling growth. While earnings are rear-facing, the emerging trends seen in the company’s Q3 results can serve as a foundation for further rewards for shareholders.
However, PLTR’s market multiple implies it could take an investor nearly half a century to recover their initial investment, assuming earnings remained constant. But the assumption from the company — and from Wall Street analysts — is that earnings will continue to grow. So while there is concern about its valuation, what can investors expect from Palantir over the next year? 24/7 Wall St. did some analysis, so let’s take a look at.
-
Palantir’s government line of business accounts for more than half of its revenue, with existing contracts between the AI firm and the U.S. Department of Defense, Immigration and Customs Enforcement (ICE), the Department of Agriculture, the FBI, the CDC, the U.S. Army and the UK’s Ministry of Defence, to name a handful.
-
The company’s explosive commercial revenue growth shows that it is capable of sustainably scaling without being overly reliant upon federal contracts. It also provides services to numerous industries, including energy, data protection, health and life sciences, insurance, hospital operations, retail, semiconductors, telecommunications and utilities, among others.
-
If you’re thinking about retiring or know someone who is, there are three quick questions causing many Americans to realize they can retire earlier than expected. take 5 minutes to learn more here
