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Investing.com - Goldman Sachs raised its price target on Palantir Technologies Inc. (NASDAQ:PLTR) to $188.00 from a previous target, while maintaining a Neutral rating on the data analytics company. Palantir’s stock is currently trading at $207.18, just shy of its 52-week high of $207.52, after delivering a staggering 400.31% return over the past year.
The price target adjustment follows Palantir’s third-quarter earnings report, which showed revenue 8% above Street expectations and EBIT margin approximately 500 basis points higher than anticipated. The company’s fourth-quarter revenue guidance also exceeded analyst expectations by 12%, with EBIT margin guidance approximately 300 basis points above consensus. InvestingPro data shows Palantir maintains impressive gross profit margins of 80.03%, with revenue growing at 38.79% over the last twelve months.
Despite the strong results, Palantir stock was indicated down 4% in after-hours trading, a reaction Goldman Sachs attributed to high expectations following the company’s significant year-to-date performance, which has seen the stock rise 175%. According to InvestingPro data, PLTR’s actual year-to-date return stands at 173.94%, with the RSI suggesting the stock is in overbought territory. Discover 20+ more exclusive ProTips and comprehensive analysis in Palantir’s Pro Research Report.
Goldman Sachs identified Palantir as one of a select group of software companies currently benefiting from AI deployments, noting increased deal sizes and higher revenue per customer as enterprises move from experimental AI use cases to enterprise-wide deployments. This trend is reflected in Palantir’s 5-year revenue CAGR of 31%, with analysts expecting continued sales growth this year.
The investment bank’s Neutral stance reflects a balance between Palantir’s strong market position and concerns about long-term ecosystem risks, along with the stock’s premium valuation, which Goldman calculates at approximately 80 times EV/Sales and over 150 times EV/FCF based on 2026 projections. InvestingPro analysis confirms this premium pricing, with current P/E ratio at 684.89 and EV/EBITDA at 811.98, suggesting Palantir is significantly overvalued compared to its Fair Value. Check out the Most Overvalued list for similar high-flying stocks.
In other recent news, Palantir Technologies has reported its ninth consecutive quarter of accelerating revenue growth, with a significant 63% increase in the third quarter compared to 48% in the second quarter. The company’s revenue has reached a scale of $4.7 billion. This strong performance has prompted several analyst firms to adjust their price targets for Palantir. BofA Securities raised its target to $255 from $215, maintaining a Buy rating, while UBS increased its target to $205 from $165, keeping a Neutral stance. Similarly, Baird adjusted its target to $200 from $170, also maintaining a Neutral rating. Jefferies raised its target to $70 from $60, despite maintaining an Underperform rating. Additionally, Palantir has formed a joint venture named Aither with Dubai Holding in the UAE, aimed at enhancing AI capabilities across various sectors in Dubai. This partnership formalizes 18 months of collaboration between the two entities.
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