Palantir Q2 Earnings Beat Estimates; Shares Pop 11%

Shares of Palantir (PLTR) jumped 11.36% to close at $24.89 on August 12 after the software company delivered better-than-expected second-quarter results driven by an increase in its customer base.

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Adjusted earnings per share landed at $0.04 in Q2, beating consensus estimates of $0.03 a share. Additionally, revenue was up 49% year-over-year to $376 million and was above Street estimates of $353.23 million.

In other positive news, U.S commercial revenue was up 90% compared to the same quarter last year. Notably, Palantir secured 62 deals of at least $1 million, with 30 deals worth $5 million or more and 21 worth $10 million or more.

The total customer base increased 13% compared to the first quarter, as Palantir added a net of 20 new customers. (See Palantir stock charts on TipRanks)

Palantir exited the first half of the year with cash from operations of $140 million and adjusted free cash flow of $201 million.

Palantir expects $385 million in revenue in Q3, above consensus estimates of $376.4 million.

The company has also raised its full-year outlook and now expects $300 million or more in adjusted free cash flow compared to the $150 million initially projected. Additionally, revenue is expected to grow by at least 30% annually from 2021 through 2025.

Yesterday, Jefferies analyst Brent Thill reiterated a Buy rating on the stock and raised the price target to $30 from $28, implying 20.53% upside potential to current levels.

According to Thill, Palantir is well-positioned to exceed $4 billion in revenues by 2025 after recording 49% growth in Q2.

Consensus among analysts is a Moderate Sell based on 1 Buy and 2 Sells. The average Palantir price target of $23.50 implies 5.58% downside potential to current levels.