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On Tuesday, DA Davidson significantly increased its price target on Palantir Technologies Inc . (NASDAQ:PLTR) shares, setting the new goal at $105.00, a substantial rise from the previous target of $47.00, while maintaining a Neutral rating on the stock. The stock, currently trading near its 52-week high of $85.22, has delivered an impressive 392% return over the past year. According to InvestingPro analysis, the company appears to be trading above its Fair Value, with a market capitalization of $190.76 billion. This adjustment came after Palantir reported a particularly strong quarter, with revenue growth gaining momentum due to robust demand in the United States for artificial intelligence solutions. This news led to a rise in Palantir’s stock price after hours.
According to DA Davidson analysts, Palantir’s recent financial performance exceeded expectations, with a revenue beat of approximately $59 million for the quarter. This figure represents a significant increase from the $27 million surplus reported in the previous quarter, accelerating the company’s year-over-year revenue growth to 36%, up from 30% in the last quarter. InvestingPro data reveals the company maintains an impressive 81.1% gross profit margin, with overall revenue growth of 24.52% in the last twelve months. For deeper insights into Palantir’s financials and 19 additional ProTips, consider exploring InvestingPro’s comprehensive research report. The firm credits Palantir’s success primarily to its U.S. operations, which have been a driving force behind the company’s financial results.
The momentum of Palantir’s business with the U.S. government has been particularly noteworthy, contributing to an accelerated growth rate of 45% year-over-year, up from 40% in the previous period. This growth comes despite the fact that favorable deal timing had already benefitted the company’s results in the last quarter. Moreover, Palantir’s U.S. commercial revenue continued to show robust health, growing 76% year-over-year, excluding revenue from strategic commercial contracts. This growth rate marks an increase from the 59% growth reported in the previous quarter.
Palantir’s revenue from strategic commercial contracts also performed well, coming in at $9.6 million, which was slightly higher than management’s expectations of approximately $7 million. The company’s ability to help customers effectively utilize large language models (LLMs) through its Ontology platform has positioned Palantir to continue benefiting from the increasing demand for AI solutions. Despite the positive outcomes and raised price target, DA Davidson’s stance on the stock remains neutral. InvestingPro’s analysis shows strong financial health indicators, including a robust current ratio of 5.67 and minimal debt levels, with a debt-to-equity ratio of just 0.06. These metrics, along with detailed valuation analysis and future growth projections, are available in InvestingPro’s exclusive research report, part of their coverage of over 1,400 US equities.
In other recent news, Palantir Technologies has seen significant developments. The company is preparing to announce its fourth-quarter earnings for 2024, with BofA Securities analyst Mariana Perez Mora projecting revenues to exceed the anticipated range of $767 to $771 million. Other analysts have shared their perspectives; Citi maintained a Neutral rating and $42.00 price target, while Jefferies reiterated an Underperform rating with a $28.00 target. Wedbush Securities, however, increased its price target from $75 to $90, reflecting confidence in Palantir’s artificial intelligence strategy.
Notably, Palantir secured a substantial contract with the U.S. Army, valued at approximately $400.7 million. The company’s fourth-quarter earnings estimates were revised due to the vesting of approximately $120 million in stock appreciation rights, although projections for adjusted EBITDA and adjusted earnings per share remain unchanged.
In related news, 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 developments underscore the dynamic and evolving landscape of artificial intelligence and data analytics in which Palantir operates.
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