Palantir Nabs Mission Command Contract With US Army; Street Says Hold

Palantir Technologies has been selected by the US Army to receive one of two prototype contracts to accelerate the army’s network modernization. Shares ticked up 1.8% in Wednesday’s after-market trading.

Don't Miss our Black Friday Offers:

Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter

Financial terms of the contract weren’t disclosed. Palantir (PLTR) said the contract marks the first time its Gotham software will be integrated with the army’s latest mission command software application, called the Command Post Computing Environment (CPCE), turning the data analytics firm into a key partner in the army’s modernization.

Specifically, CPCE is providing army commanders with better visualization tools, common applications and new server infrastructure. As part of the contract, Palantir will work at the intersection of intelligence, mission planning and execution, to provide a single, integrated solution to give commanders a global operational picture to make better data-driven decisions.

“We’re excited to partner on this important mission to modernize the army’s mission command capabilities,” said Palantir’s Doug Philippone. “The army’s proactive approach in seeking out opportunities to deploy commercially-available solutions has been instrumental in getting critical capabilities into the hands of warfighters faster.”

Palantir added that the goal is to improve access to critical data for commanders, deliver efficient use of networks in denied and degraded battlefield environments, and increase the ability to collaborate with joint and allied partners.

Palantir last week exceeded analysts’ expectations in what marked its first quarter as a public company and raised its 2020 revenue outlook. In reaction, Credit Suisse analyst Brad Zelnick raised the stock’s price target to $13 from $11, but maintained a Hold rating, as he is still looking for growth drivers to pan out.

“The company’s commercial segment accelerated and 4Q guidance also came in above Street expectations. That said, cash flow disappointed as the impact from lower upfront payments weighed on cash generation,” Zelnick commented in a note to investors. “We see a number of levers for durable growth next year including additional COVID related opportunities and modularized product packaging which will help reduce friction with IT departments, remove pricing barriers and shorten sale cycles over time.” (See PLTR stock analysis on TipRanks)

Similarly, Citigroup analyst Tyler Radke last week stuck to his Hold rating and $10 price target, saying that “for high growth to sustain beyond 2021, we think it is critical Palantir shows stronger new customer growth, which remains lackluster.”

The rest of the Street is sidelined on the stock. The Hold analyst consensus is based on 5 Holds versus only 1 Hold. With shares up by about 88% since their listing in September, the average price target stands at $13.50 implying downside potential of about 25% to current levels.