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On Tuesday, Cantor Fitzgerald increased its price target on Palantir Technologies Inc . (NASDAQ:PLTR) to $110 from the previous $98, while maintaining a Neutral rating on the stock. The company’s stock has shown remarkable momentum, delivering a 391% return over the past year. According to InvestingPro analysis, the stock appears overvalued at current levels, with technical indicators suggesting overbought conditions. The adjustment follows Palantir’s first-quarter earnings for 2025, which surpassed the Visible Alpha consensus by 2.5%. This outperformance was attributed to strong results in the U.S. Commercial sector, which exceeded expectations by 10%, and the total Government revenue, which was 5% above forecasts.
Despite the positive aspects of the report, the firm noted that the level of revenue outperformance was lower compared to the previous quarter. International revenues, especially in overseas commercial sectors, fell short of expectations by 16%, reflecting ongoing challenges in Europe. Palantir’s management has pointed to structural changes in Europe, suggesting a lack of understanding of AI technology in the region.
Customer growth also experienced a slowdown, with net customer additions dropping to 58 in the first quarter of 2025, down from 82 in the fourth quarter of 2024. This was partly attributed to the seasonally slower nature of the first quarter and a slowdown in international markets, with only one net new international customer compared to 11 or 12 in previous quarters. Year-over-year growth rates for customers generally slowed, with total customers growing at 39%, a decrease from 43% in the previous quarter, and U.S. commercial customer growth decelerating to 65% from 73%.
Despite these challenges, Palantir’s margins were a source of positive surprise, with EBIT margins reaching 44%, surpassing the consensus of 42%, and free cash flow (FCF) margins at 42%, beating the consensus of 32%. InvestingPro data reveals impressive gross profit margins of 80.25%, while maintaining a healthy current ratio of 5.96x. The company’s overall financial health score is rated as "GREAT" by InvestingPro analysts. The company’s performance indicates a continued investment from global organizations in AI to enhance business outcomes and operational efficiency.
Cantor Fitzgerald’s analyst believes that Palantir is well-positioned to benefit from the ongoing trends in AI investment, supporting its dynamic growth. The firm’s Neutral rating is primarily based on valuation considerations, but the raised price target reflects Palantir’s strong first-quarter performance and improved guidance for the upcoming periods. With expected revenue growth of 31% and analysts forecasting improved profitability this year, the company shows promising momentum. For deeper insights into Palantir’s valuation and growth prospects, InvestingPro subscribers can access comprehensive analysis including 18 additional ProTips and detailed financial metrics in the Pro Research Report.
In other recent news, Palantir Technologies Inc. reported a 39% increase in revenue, marking its seventh consecutive quarter of growth acceleration. UBS highlighted this performance, noting a 71% year-over-year growth in U.S. commercial revenues, but also pointed out a slight shortfall in international commercial revenues. Despite these positive results, Palantir’s stock experienced a decline in after-hours trading, attributed to a narrower-than-expected revenue beat. Loop Capital raised its price target for Palantir to $130, maintaining a Buy rating, and emphasized the company’s strong performance and potential in the enterprise AI market. Conversely, RBC Capital maintained an Underperform rating, expressing concerns about growth potential and valuation, while keeping a price target of $40. Deutsche Bank (ETR:DBKGn) lifted its price target to $80, acknowledging Palantir’s AI momentum but maintaining a Sell rating due to valuation concerns. William Blair noted Palantir’s raised 2025 guidance but maintained a Market Perform rating, citing potential risks of revenue growth slowing in the latter half of the year. These developments reflect a mix of optimism and caution among analysts regarding Palantir’s financial outlook and market positioning.
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