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On Monday, Citi analysts maintained their Neutral rating and $42.00 price target for Palantir Technologies Inc . (NASDAQ:PLTR), which currently trades near its 52-week high of $85.22. The firm updated its model to account for the impact of Stock Appreciation Rights (SARs), resulting in an approximate $120 million increase in stock-based compensation (SBC). This adjustment has led to a $0.04 decrease in the estimated GAAP EPS for the fourth quarter of 2024. According to InvestingPro analysis, the stock appears overvalued at its current market capitalization of $190.4 billion.
Palantir is anticipated to have a smaller beat cadence compared to the previous quarter due to several factors. Weaker government seasonality, a ~60% decline in the government deal tracker, and U.S. commercial business facing a challenging comparison year are among the reasons cited. Despite these adjustments, the changes are not significant enough to alter the non-GAAP estimates or the target price for Palantir’s stock. InvestingPro data shows impressive revenue growth of 24.52% and industry-leading gross margins of 81.1%, with 18 additional ProTips available for subscribers.
The company is recognized for its strong positioning to capitalize on the growing demand for data modernization and Generation AI (GenAI) projects across enterprise and government sectors. Palantir’s revamped commercial strategy has been successful in accelerating the acquisition of new customers and boosting U.S. commercial growth.
However, Palantir continues to navigate through certain challenges. The company’s investments and revenue agreements with Special Purpose Acquisition Companies (SPACs) over the past few years, along with sluggish government revenue, have contributed to more modest total growth rates. Despite these headwinds, the target price remains unchanged, reflecting the firm’s outlook on Palantir’s stock value.
In other recent news, Palantir Technologies has been the subject of various significant developments. The company’s fourth-quarter earnings estimates were revised by Raymond (NSE:RYMD) James due to the vesting of approximately $120 million in stock appreciation rights. However, projections for adjusted EBITDA and adjusted earnings per share remain unchanged. Palantir also secured a significant contract with the U.S. Army, valued at approximately $400.7 million.
Analysts have provided mixed feedback on Palantir’s performance. Morgan Stanley (NYSE:MS) downgraded Palantir to an Underweight rating due to valuation concerns, while Jefferies maintained an Underperform rating with a steady price target of $28.00. On the other hand, Wedbush Securities increased its price target on Palantir’s shares from $75 to $90, reflecting confidence in the company’s artificial intelligence strategy.
In other recent developments, Chinese AI startup DeepSeek’s chatbot was found to have a low accuracy rate in delivering news, according to an audit by NewsGuard. Despite this, the chatbot quickly became the most downloaded app in Apple (NASDAQ:AAPL)’s App Store. These are some of the recent developments involving Palantir Technologies and DeepSeek.
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