Palantir’s Revenue Jumps 30% in Q3, Boosting Stock by Over 22%
Palantir Technologies Inc. (NASDAQ: PLTR) reported third-quarter earnings that exceeded Wall Street expectations, marking a significant milestone for the data analytics company. The company reported a revenue increase of 30% to $725.5 million, surpassing the consensus estimate of $701.1 million.
This growth marks the fifth consecutive quarter of accelerated revenue growth, driven by strong demand for Palantir’s artificial intelligence (AI) solutions. The company’s GAAP operating margin stood at 16%, while the adjusted operating margin reached 38%, reflecting robust operational efficiency.
Palantir’s Stellar Quarter Driven by US Operations
Palantir’s impressive financial performance was primarily fueled by its operations in the United States, where revenue surged by 44% to $499 million. This includes a 54% rise in U.S. commercial revenue and a 40% increase in U.S. government revenue.
A significant contributor to this growth was the company’s new Artificial Intelligence Platform (AIP), which has become a critical component of its revenue strategy. Adjusted earnings per share rose from $0.07 to $0.10, surpassing the consensus estimate of $0.09.
The U.S. government’s increased investment in Palantir’s products, particularly for defense applications, has also been a key driver of the company’s revenue growth. Government contracts, including a substantial $100 million agreement with the U.S. military, have significantly bolstered Palantir’s financial results.
In the most recent quarter, U.S. government revenue reached $320 million, accounting for 56% of the company’s total revenue.
PLTR Stock Hits Record High But Analysts Remain Concerned
Palantir’s stock has experienced a significant upswing, reflecting investor confidence following the company’s earnings announcement. As of November 5, 2024, the stock price stood at $50.92, marking a 22.98% increase.
Year-to-date, the stock has delivered a return of 196.59%, with a one-year return of 169.59%. Despite the impressive stock performance, analysts remain cautious about the company’s long-term valuation. The stock has a “Hold” average rating, with some analysts issuing “sell” ratings due to concerns over sustainability and high valuation.
Despite the strong earnings report, analysts have expressed skepticism regarding Palantir’s long-term value. Concerns have been raised about the sustainability of U.S. commercial growth and the stock’s premium valuation.
Deutsche Bank analyst Brad Zelnick, for instance, has kept a “Sell” rating, predicting a decline in the stock price to $26. However, Palantir’s CEO, Alex Karp, remains optimistic about the company’s future, emphasizing its position in the tech innovation space.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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