Software company Palantir Technologies Inc. (NYSE: PLTR) recently revealed that it has entered into a global strategic partnership with a technical professional services firm, Jacobs (NYSE: J), to develop data driven technology solutions for the infrastructure and national security markets.
Shares of Palantir reacted adversely to the news and fell over 2% to close at $11.90 in Wednesday’s extended trading session.
Strategic Impact
The partnership will initially focus on the water sector with the launch of a joint data analytics offering to support public and private sector clients in solving their water infrastructure problems by aggregating and analyzing plant data.
While Palantir will make use of its Palantir Foundry operating system to help increase plant performance, reduce lifecycle costs and secure plants from cyber threats, Jacobs will be leveraging its existing O&M portfolio, machine learning modules and wastewater process optimization tools
Management Commentary
The CEO of Palantir, Alex Karp, said, “Palantir is proud to partner with Jacobs to revolutionize water treatment and looks forward to working together across sectors tackling the world’s most pressing problems. Jacobs’ vision, technical expertise and speed of execution make Jacobs an ideal partner for Palantir.”
Stock Rating
Recently, RBC Capital analyst Rishi Jaluria reiterated a Sell rating on the stock with a price target of $9, which implies downside potential of 25.4% from current levels.
The analyst said, “In 4Q, Government Deal Value was $1.2B, decelerating for the second consecutive quarter to down 6% Y/Y from up 7% in 3Q and up 13% in 2Q. Recall, Government revenue decelerated 50 pts during CY21, from up 76% in 1Q to up 26% in 4Q, and customers were flat. We continue to believe Government is the stronger piece of Palantir’s business and will continue to monitor for large deals that could reaccelerate growth, but the slowdown remains worrisome in our view.”
Consensus among analysts is a Moderate Sell based on 1 Buy, 3 Holds and 4 Sells. The average Palantir stock prediction of $13.17 implies upside potential of 9.2% from current levels. Shares have declined 48.9% over the past year.
Negative Sentiment
TipRanks’ Stock Investors tool shows that investors currently have a Very Negative stance on PLTR, as 4.2% of portfolios tracked by TipRanks decreased their exposure to PLTR stock over the past 30 days.
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