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On Tuesday, UBS analyst Karl Keirstead increased the price target for Palantir Technologies Inc . (NASDAQ:PLTR) to $110 from the previous target of $105, while continuing to hold a Neutral stance on the stock. The adjustment follows Palantir’s announcement of its seventh consecutive quarter of revenue growth acceleration, reaching 39%. According to InvestingPro data, the company maintains impressive gross profit margins of 80.25% and has achieved 28.79% revenue growth over the last twelve months. Keirstead highlighted the company’s impressive performance, especially given the current macroeconomic uncertainties and questions surrounding U.S. government spending.
Palantir’s stock experienced a 9% decline in after-hours trading, which Keirstead attributed to a narrower-than-anticipated first-quarter revenue beat of 2.5% and a slight shortfall in commercial revenues, with the positive results primarily coming from government contracts. Despite the after-hours dip, Palantir’s stock has seen a 63% increase year-to-date, reaching a market capitalization of $255 billion. InvestingPro analysis indicates the stock is currently trading above its Fair Value, with a concerning P/E ratio of 519x. This elevated valuation, along with UBS’s estimate of 115 times calendar year 2026 free cash flow, is considered a significant barrier to a rating upgrade.
The report from UBS also noted a substantial 71% year-over-year growth in U.S. commercial revenues, with a record $41 million sequential revenue increase and an upward revision of the U.S. commercial revenue forecast for the year. However, international commercial revenues did not meet expectations, which contributed to the smaller revenue beat. The company’s CEO remarked on the slower adoption of AI in Europe as a factor.
In terms of government revenue, Palantir saw a steady 45% year-over-year growth in U.S. government revenues, which Keirstead sees as a sign that the company is benefiting from shifts in Department of Defense spending priorities. The report also mentioned that the company anticipates a more significant portion of its annual revenue to occur in the second half of the year, with particular uncertainty around government contract timings.
As a result of these developments, UBS has revised its 2025 revenue growth estimate for Palantir to 38% from the previous 31%, and its free cash flow estimate to $1.87 billion from $1.70 billion. Despite the impressive fundamentals and an overall "GREAT" financial health score according to InvestingPro, UBS maintains its neutral position due to valuation concerns. InvestingPro subscribers have access to 18 additional key insights and a comprehensive Pro Research Report for PLTR, helping investors make more informed decisions about this rapidly growing technology company.
In other recent news, Palantir Technologies Inc. has reported strong financial performance, with revenue growing by 39% to $884 million, surpassing analyst expectations. The company’s U.S. commercial growth was particularly robust, with a 71% increase. Palantir also raised its revenue guidance by $147 million, indicating confidence in its future earnings potential. Despite these positive developments, RBC Capital maintained an Underperform rating, citing concerns about growth potential and product differentiation, while Loop Capital raised its price target to $130, maintaining a Buy rating due to strong fundamentals. Deutsche Bank (ETR:DBKGn) adjusted its price target to $80 from $50, yet kept a Sell rating, expressing concerns about the company’s high valuation. William Blair noted Palantir’s raised 2025 guidance and maintained a Market Perform rating, acknowledging the company’s alignment with government contract initiatives. Jefferies also maintained an Underperform rating with a $60 target, highlighting concerns about Palantir’s valuation and international demand trends. These recent developments show a mix of optimism and caution among analysts regarding Palantir’s future performance.
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