Palantir Wins $31.5M U.K. National Health Service Contract

Palantir Technologies has signed a two-year contract worth up to $31.5 million (£23.5 Million) with the UK’s National Health Service (NHS England and NHS Improvement). Shares rose 2.3% on Wednesday.

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Palantir Foundry will provide the National Health Service with a software platform for the secure and timely processing of data, while protecting patients’ privacy. Palantir’s (PLTR) software platform will help NHS to optimize use of resources and improve patient care.

The company stated, “NHS personnel will use Palantir Foundry to understand how COVID-19 is spreading, identify risks to particularly vulnerable populations, proactively increase health and care resources in emerging hot spots, ensure critical equipment is supplied to the facilities with the greatest need, and divert patients and service users to the facilities that are best able to care for them.”

Palantir added that the NHS will continue to use Palantir Foundry as part of its COVID-19 response, including the planning and operational roll-out of the UK’s vaccine program. (See PLTR stock analysis on TipRanks)

Last week, Credit Suisse analyst Brad Zelnick downgraded Palantir to Sell from Hold but increased the price target to $17 from $13. The analyst noted that the stock’s valuation is “disconnected from fundamentals,” trading over 50% above a “previous blue sky scenario.” Zelnick stated that with the stock trading at 46 times enterprise value to 2021 revenue, the risk/reward is “skewed to the downside.”

Zelnick believes the stock’s current valuation “ignores a number of risks,” including heightened large deal scrutiny and founder control.

Overall, the Street has a Hold analyst consensus for Palantir based on 1 Buy, 3 Holds and 2 Sells. Palantir went public in September of this year. The average price target of $14.50 indicates a possible downside of 49.5% from current levels.