A recent Stocktwits poll showed that about two-thirds of retail investors expect the analytics firm to beat top- and bottom-line expectations.
- Stocktwits sentiment for PLTR rises to ‘extremely bullish,’ as the stock slides in the last six sessions straight.
- Analysts expect a 62% jump in revenue – pace similar to the previous quarter – and a 64% increase in adjusted profit.
- Palantir reports after the market closes on Monday.
Palantir Technologies, Inc. heads into its fourth-quarter earnings after the bell on Monday, facing its most crucial test yet, as investors question whether the analytics firm can sustain the business momentum that drove its stock over the past two years, even as retail investors bet on a strong showing.
Concerns are apparent, with PLTR falling for six straight sessions. The stock declined 17.5% in January and is down 30% from its Nov. 3 peak. Analysts, too, have reined in expectations: 16 of 27 recommend a ‘Hold’ on the shares, seven rate it ‘Buy’ or higher, and four advise ‘Sell’ or lower, according to Koyfin.
Palantir’s fourth-quarter revenue is expected to rise 62% to $1.34 billion – nearly as much as the 63% pace, the highest on record, in the preceding third-quarter, according to analysts’ consensus estimates from Koyfin. Adjusted profit is expected to rise by over 64% to $0.23 per share.
Retail Still Wants A Piece
Retail investors, however, are upbeat. About two-thirds of over 10,000 respondents in a recent Stocktwits poll voted that they believe Palantir would beat top- and bottom-line expectations.
The retail sentiment climbed over the weekend and was ‘extremely bullish’ as of late Sunday, even as members discussed expectations of a bounce due to its “oversold” condition and concerns over the fact that the stock has long been viewed as “overvalued.”
Palantir trades at 157 times its forward one-year price-to-earnings – among the highest in the software industry and the broader market. Data analytics rivals Snowflake and Datadog trade at 134 times and 58 times, respectively. On the AI side, the market's bellwether, Nvidia, trades at 27.2 times.
Mixed Signals
“The run and hype is over, going back below $100 and staying there until it has reasons to go up again,” remarked a user. “Who wants to hold a stock in danger of crashing month after month… If earnings are anything close to flat on growth, this dumps hard.”
Meanwhile, some analysts have a more cautious stance. Palantir faces an unfavorable risk-reward profile heading into its Q4 earnings, the brokerage said in a recent note. There is skepticism around its strong business momentum, as RBC’s checks show slowing activity in its key government business.
Palantir remains the most expensive name in its software coverage, and its valuation could prove unsustainable, the investment research firm said.
Citi recently upgraded its rating on Palantir stock to ‘Buy’ from ‘Neutral,’ while Phillip Securities initiated coverage with a ‘Buy’ rating. Citi said recent CIO surveys and industry checks show Palantir’s enterprise use cases are accelerating, with defense modernization urgency seen as a key driver of its government business.
In recent months, Palantir broadened its government business, including deals to co-develop sovereign AI infrastructure in Europe and a 240 million pound contract from the UK Ministry of Defence.
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