Key Takeaways
- UBS upgraded Palantir $PLTR to Buy from Neutral with a $180 price target after shares declined roughly 35% from recent highs
- Rosenblatt Securities initiated coverage with a Buy rating and $150 price target, citing current price levels as an “attractive entry point”
- Q4 earnings beat expectations: EPS of $0.25 versus $0.23 estimate, revenue of $1.41B versus $1.34B forecast, reflecting 70% YoY growth
- Insiders sold over 1 million shares worth approximately $142M in the latest quarter, bringing insider ownership down to around 9.23%
- Analyst consensus sits at “Moderate Buy” with an average price target of $191.05, implying roughly 38.9% upside potential
Palantir $PLTR shares climbed 1.3% on Thursday, closing at $135.94, after receiving an upgrade from UBS, which elevated its rating from Neutral to Buy and set a price target of $180.
Palantir Technologies Inc., PLTR
UBS analyst Karl Keirstead urged investors to capitalize on the stock’s approximately 35% pullback from its recent highs. He described Palantir as a “premier growth story” in the software industry and emphasized the company’s strategic position “at the nexus of the two most powerful spending trends — AI and Data.”
Keirstead referenced proprietary industry research showing a “very strong demand backdrop,” suggesting robust customer engagement and accelerating adoption rates. UBS forecasts approximately 70% revenue growth through 2026, with margins expected to hold steady in the mid-50% range.
The stock hit an intraday high of $137.51. Volume reached around 44.5 million shares, approximately 13% below the normal daily average.
Rosenblatt Joins the Bullish Camp
Also on Thursday, Rosenblatt Securities analyst John McPeake initiated coverage on the stock with a Buy rating and a $150 price target.
McPeake described Palantir as a “market-disrupting, uniquely positioned AI software leader.” He suggested the stock’s 33% decline from its October highs presents an attractive opportunity for investors.
He expects the company to maintain strong growth rates while benefiting from increasing operational leverage as it scales. The company currently boasts an 82% gross profit margin, with revenue growing 56% over the past twelve months.
These upgrades add to recent positive commentary from Mizuho, Freedom Capital, and Robert W. Baird. The Street’s consensus rating stands at “Moderate Buy,” with 14 Buy ratings, 4 Hold ratings, and 2 Sell ratings, alongside an average price target of $191.05.
Impressive Q4 Results Overshadowed by Valuation Questions
Palantir reported fourth quarter earnings on February 2nd. The company posted earnings per share of $0.25, beating the analyst consensus of $0.23. Revenue came in at $1.41 billion, above the $1.34 billion Street estimate and representing a 70% increase year-over-year.
The company’s return on equity stood at 23.81% with a net margin of 36.31%. Analysts project full-year earnings per share of $0.31.
Despite strong fundamentals, the stock trades at a P/E ratio near 216. This lofty valuation multiple leaves little room for error if the company faces any operational headwinds.
The 50-day moving average sits at $161.79, while the 200-day moving average is at $170.49. The company’s market cap currently stands at $324 billion.
Institutional investors and hedge funds own 45.65% of the company’s shares. Several smaller investment firms have increased their positions in recent quarters.
One red flag: insiders sold more than 1.05 million shares valued at roughly $142 million in the most recent quarter. Insider Ryan Taylor sold 19,988 shares on February 20th at $133.72 each. Insider Stephen Cohen dumped 327,088 shares the same day, reducing his holdings by 99.82%.
Current insider ownership stands at 9.23%.
On a positive note, DISA granted Palantir’s PFCS Forward provisional Impact Level 6 authorization, allowing deployment in the most secure Department of Defense cloud environments. Separately, Rackspace was named a dedicated implementation partner for Palantir’s Foundry and AIP platforms.
PLTR closed Thursday’s session at $135.94.
