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As a result, RBC analyst Rishi Jaluria downgraded shares to Underperform from Sector Perform with a $6.00 per share price target, down from $12.00. The analyst has “decreased confidence in PLTR achieving its 30%+ growth target.”
“Although we expected PLTR near-term upside from US federal budgets being passed in mid-March and ongoing geopolitical tensions overseas, results were disappointing to us given: 1) 1Q topline lacked upside to consensus; 2) 2Q guide missed consensus on both revenue growth & profitability; and 3) Total Deal Value growth ex ‘investment agreements’ declined both Y/Y and Q/Q. The lone positive was mgmt’s decision to wind down the investment program but this doesn’t change the underlying business fundamentals,” Jaluria said in a client note.
Citi analyst Tyler Radke cut the PT to $7.00 per share from $10.00 on further slowing growth and weaker profitability.
“Palantir’s underlying growth continued to slow in Q1 with the smallest quarterly revenue beat to date and Q3 guidance below the street and the company’s 30% target. Growth metrics, when adjusted for SPAC revenue, looked even worse with minimal commercial deal value growth, and incremental slowdowns in total/commercial revenue. While management expressed optimism in Government growth rebounding in 2H from budget resolution and ongoing Ukraine conflict, it’s difficult to put much confidence in this with most Q2 leading indicators suggesting slowing growth, and incrementally weaker profitability,” the analyst told clients.
Radke also caught up with PLTR’s management after the Q1 call. Key takeaways are:
By Senad Karaahmetovic
