“The momentum we are seeing across sectors, both commercial and government, is unlike anything that has come before,” declared Palantir (NASDAQ:PLTR) CEO Alex Karp in his most recent letter to shareholders unveiling the big data analytics’ company’s Q4 2024 numbers.
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Karp could afford to be a bit haughty, as PLTR’s Q4 revenues continued to grow by leaps and bounds, reaching $828 million for the quarter, which represented 36% and 14% year-over-year and quarter-over-quarter gains, respectively.
Not surprisingly, the market responded favorably, and stocks surged almost 30% upon the news. All told, shares are up over 500% over the past twelve months. With shares now trading at high valuations, is now the time to buy in?
Top investor Michael Wiggins De Oleivera–who sits in the top 3% of TipRanks’ stock pros–believes that it is.
“While paying 115x forward free cash flow undeniably looks expensive, the company’s ability to deliver exceptional growth and turn AI technology into actionable insights makes it a rare and formidable player in the market,” explains the 5-star investor.
The investor, who has previously not been sold on PLTR, was extremely impressed with the company’s Q4 report, especially growing commercial revenues that were up 64% year-over-year.
“Their Q4 earnings report was unblemished,” states the investor.
Looking at the future of the AI race, Wiggins De Oliveira posits that the market will be shifting its attention more and more towards those software firms most capable of capturing the “buzz” emanating from this space. Wiggins De Oliveira notes that PLTR’s demonstrated ability to utilize AI to achieve real results makes it well-situated to continue appealing to investors.
The investor adds that PLTR is guiding for free cash flow of $1.7 billion. While acknowledging that a share price of 115x forward free cash flow is not cheap, Wiggins De Oliveira believes it to be a reasonable one.
“Bearish investors can waste time wailing about its valuation, but when it comes down to it, Palantir is growing incessantly and unrelentingly, in a sustainable and predictable manner,” explains the investor, who is upgrading PLTR to a Buy. (To watch Michael Wiggins De Oliveira’s track record, click here)
Wall Street, on the other hand, is not quite as bullish. With 2 Buy, 11 Hold, and 5 Sell ratings, PLTR holds a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $81.47 would translate into losses of over 20%. (See PLTR stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
