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On Tuesday, Mizuho (NYSE:MFG) Securities adjusted its outlook on Palantir Technologies Inc . (NASDAQ:PLTR) shares, raising the price target significantly to $80 from the previous $44, while continuing to recommend an Underperform rating for the stock. The revision follows Palantir’s report of a strong fourth quarter, which saw a 36% year-over-year revenue increase, surpassing the consensus projections of approximately 28% growth. This performance was attributed primarily to the company’s accelerated growth in its US Commercial and US Government segments. The company maintains impressive gross profit margins of 81% and has demonstrated strong financial health, earning a "GREAT" rating from InvestingPro.
Palantir management has provided optimistic guidance for the first quarter, projecting continued revenue growth at 36%. Additionally, the initial revenue guidance for 2025 indicates an expected 31% year-over-year growth, a figure that also exceeds previous estimates. Mizuho analysts acknowledged the company’s impressive results and noted that Palantir’s stock has experienced a significant surge over the past few months, with a remarkable 392% return over the past year. According to InvestingPro analysis, the stock is currently trading near its 52-week high of $85.22, suggesting strong momentum.
Currently, Palantir is trading at 56 times its projected 2026 revenue, which anticipates growth in the mid-30s percentage range. Despite recognizing Palantir’s strong market position and successful execution, which warrants a premium valuation, Mizuho analysts expressed difficulty in justifying the company’s high multiple. They believe that the current valuation already reflects significant anticipated acceleration and upside compared to consensus expectations, suggesting caution in the face of such an aggressive market pricing. This view aligns with InvestingPro’s Fair Value assessment, which indicates the stock is currently overvalued, despite strong fundamentals including a healthy current ratio of 5.67 and minimal debt levels.
In other recent news, Palantir Technologies has seen a series of upward adjustments in stock price targets following robust financial results and strong growth in both U.S. commercial and government sectors. RBC has raised the price target to $40, maintaining an underperform rating, while Cantor Fitzgerald increased it to $98, and UBS to $105, both with a neutral rating. Baird also raised its price target to $100, maintaining a neutral rating.
These adjustments followed Palantir’s impressive Q4 earnings, which showcased a 64% growth in U.S. commercial revenue and an adjusted EBIT that beat estimates by about 19%. The company also secured a significant contract with the U.S. Army, valued at approximately $400.7 million.
Despite these positive indicators, most firms, including RBC, Cantor Fitzgerald, UBS, and Baird, maintained a neutral rating on the stock, indicating a cautious stance on its current valuation. These recent developments underscore the dynamic performance and growth prospects of Palantir Technologies.
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