Palantir Technologies (NYSE:PLTR) is set to release its fourth quarter 2023 results on February 5, after the market closes. The strong demand for the company’s artificial intelligence (AI) platform from government and commercial customers could have positively influenced its quarterly performance.
The software company specializes in data analysis and intelligence tools. It serves government and commercial clients with its data integration and analytics platforms.
PLTR – Q4 Expectations
Analysts expect revenue to increase by 18.5% from the year-ago quarter to $602.88 million. A rising commercial customer base, fueled by strong demand for its AI offerings, likely contributed to its topline growth. Moreover, expansion efforts in the healthcare and defense sectors are anticipated to boost revenue within its government business.
Meanwhile, analysts expect the company to report earnings of $0.08 per share in Q4 compared with $0.04 per share reported in the prior-year period.
Analysts’ Ratings
Ahead of the Q4 earnings release, four analysts rated the stock a Sell while one assigned a Hold.
Citi analyst Tyler Radke reiterated a Sell rating on PLTR stock. The analyst anticipates that subdued demand in the government business segment might have offset strength in U.S. commercial business in the to-be-reported quarter.
Another analyst, Brent Thill from Jefferies, also gave a Sell rating to the stock. The analyst is skeptical about the revenue growth in the Commercial segment.
What is the Price Target for Palantir?
It is worth mentioning that PLTR stock has jumped nearly 106% in the past year. Moreover, the stock outperformed the tech-heavy Nasdaq 100 Index (NDX) rally of about 42% in one year.
Given the recent rally in Palantir stock, it has a Moderate Sell consensus rating on TipRanks, reflecting two Buy, one Hold, and five Sell recommendations. Analysts’ average PLTR stock price target of $12.20 implies a 28.32% downside potential from current levels.
Insights from Options Trading Activity
Investors should note that options traders are pricing in a +/- 13.63% move in PLTR stock on earnings, higher than the previous quarter’s earnings-related move of 5.12%.
The anticipated move is determined by computing the at-the-money straddle of the options closest to the expiration after the earnings announcement.
Learn more about TipRanks’ Options tool here
Bottom Line
Palantir’s robust position in extensive language models and generative AI technologies positions it favorably to leverage the growing market for AI platform software. However, the recent rally in Palantir stock has made it expensive on the valuation front. This is reflected in analysts’ consensus ratings and average price targets.
