Raymond James maintains Palantir stock at Market Perform

On Tuesday, Raymond (NSE:RYMD) James reiterated a Market Perform rating on Palantir Technologies Inc . (NASDAQ:PLTR), following the company’s remarkable performance that drove a 392% return over the past year. The firm highlighted Palantir’s impressive results, which included a 4.1% topline beat and significant growth in the U.S. commercial sector. According to InvestingPro data, the stock is currently trading near its 52-week high of $85.22, reflecting strong investor confidence.

Palantir Technologies ended 2024 on a high note, surpassing expectations with a 64% growth in U.S. commercial revenue and an adjusted EBIT (AEBIT) that beat estimates by approximately 19%. This robust performance was underpinned by a strong demand across various markets and continued momentum in Artificial Intelligence Programs (AIP). The company maintains impressive gross profit margins of 81.1% and has received a "GREAT" financial health score from InvestingPro, which offers 20 additional key insights about Palantir’s performance.

The company’s guidance for the coming year was notably optimistic, with a midpoint revenue projection of $3.749 billion, which is 7.4% higher than Wall Street’s expectations of $3.492 billion. Additionally, Palantir forecasted an AEBIT approximately 16% above estimates and an ambitious free cash flow (FCF) of $1.6 billion, indicating a 43% margin.

Palantir’s key metrics were particularly impressive, with the closure of $803 million in U.S. commercial total contract value (TCV), marking a quarterly increase of 170%. The U.S. commercial remaining deal value (RDV) also saw an annual increase of 99% to $1.8 billion. Furthermore, the company reported a 43% year-over-year increase in its customer count.

Despite these positive indicators, Raymond James chose to maintain their Market Perform rating. The decision was based on the belief that Palantir’s stock needs time to consolidate its significant gains from the past years and to align with its current valuation, with the stock trading at a P/E ratio of 388.88. The firm acknowledged Palantir’s strong positioning in the AI sector and its potential appeal as a "safe haven" in the prevailing market climate. Based on InvestingPro’s Fair Value analysis, the stock appears to be overvalued at current levels, supporting Raymond James’ cautious stance. For detailed valuation insights and comprehensive analysis, investors can access Palantir’s Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Palantir Technologies has seen a series of adjustments to its stock price target by various research firms. Cantor Fitzgerald raised its price target from $72 to $98, citing strong Q4 performance and growth in the US commercial and government sectors. UBS followed suit, increasing its price target from $80 to $105, highlighting a robust 36% increase in total revenues. Baird also adjusted its price target from $70 to $100 following the release of Palantir’s robust Q4 earnings.

Jefferies raised its price target from $28 to $60, while maintaining an underperform rating, and DA Davidson raised its price target to $105, noting strong revenue growth due to robust demand for artificial intelligence solutions in the US.

These adjustments come in the wake of Palantir’s impressive financial results and the company’s initial 2025 guidance, which exceeded expectations. The company’s growth has been primarily driven by its US commercial and government sectors. Analysts from various firms have acknowledged Palantir’s strong operating momentum and its leadership position in the AI sector. Despite the positive outlook, most firms maintain a neutral rating on the stock, indicating a cautious stance on its current valuation.

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