Palantir’s (PLTR) stock is down 12% as investors assess the data analytics firm’s first-quarter financial results.
Analysts across Wall Street were quick to attribute the decline of PLTR stock to financial results that showed a decline in the company’s revenue growth. The sharp drop in Palantir’s stock comes despite the fact that the company raised its forward guidance and talked up strong artificial intelligence (AI) demand.
Denver, Colorado-based Palantir announced earnings per share (EPS) of $0.13, which matched the consensus forecast among analysts. Revenue in the quarter totaled $884 million, which was ahead of the $863 million expected on Wall Street. However, while sales were up 39% from a year ago, that growth was a slowdown from previous quarters when it exceeded 40%.
Seeing Past the Hype
The decline in PLTR stock also comes despite CEO Alex Karp using much hyperbole to discuss the company’s Q1 results and its forward guidance. Karp said that “Palantir is on fire” and that he’s “very optimistic” about the rest of the year. The CEO even went so far as to quote the New Testament in Palantir’s earnings release.
Palantir said it closed 139 deals totaling at least $1 million in the January through March period, 51 of which topped $5 million. The company said that its commercial revenue grew 71% from a year ago to $255 million, while its government sales increased 45% to $373 million during Q1. Analysts said investors might be weighing the impact of a potential U.S. recession on Palantir’s future earnings.
Palantir’s stock is up 44% this year and among the top performers in the benchmark S&P 500 index.
Is PLTR Stock a Buy?
Palantir’s stock has a consensus Hold rating among 13 Wall Street analysts. That rating is based on two Buy, eight Hold, and three Sell recommendations issued in the last three months. The average PLTR price target of $89.17 implies 18% downside from current levels.
