Palantir Technologies Wins $89.9M Contract; Shares Gain

Palantir Technologies has secured an $89.9 million contract from the National Nuclear Security Administration (NNSA) for five years. Shares of the software company closed 1.6% higher on Monday.

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Notably, this marks the company’s first contract with the NNSA.

Per the contract, Palantir Technologies (PLTR) will act as the platform for the NNSA’s SAFER (Safety Analytics, Forecasting, and Evaluation Reporting) project. SAFER is the proposed platform that will integrate data and allow the NNSA to measure the health of the organization’s safety programs. As a result, the NNSA staff will be able to track, trend, query, and analyze safety metrics from different sites across the country.

Palantir’s USG President Akash Jain said, “Our work with NNSA illustrates Palantir’s mission to provide software to the world’s most important institutions in support of their most critical work.”

Earlier, during the 4Q conference call, Palantir said that its average revenue per user has risen by 41% year-over-year to $7.9 million. Furthermore, its average revenue reached $33.2 million for its top 20 customers. (See Palantir Technologies stock analysis on TipRanks)

Following the 4Q results, Morgan Stanley analyst Keith Weiss reiterated his Sell rating but increased the price target to $19 (18.9% downside potential) from $17. While Weiss remains upbeat on Palantir’s large addressable market, he sees challenges for the company in terms of reaching its revenue goal. Furthermore, Weiss finds Palantir’s current valuation unattractive.

Turning to the rest of Wall Street, Palantir Technologies has a Moderate Sell consensus rating based on 4 Sells, 2 Buys, and 1 Hold. The average analyst price target is $25.83, which implies upside potential of 10.2% to current levels.

However, from TipRanks’ Smart Score ranking, PLTR gets a 3 out of 10, suggesting that the stock is likely to underperform market expectations.