To The Moon

I believe analysts and investors who are vested in $Palantir Technologies Inc.(PLTR)$ would be keeping a close eye on the performance of Palantir Technologies in its upcoming earnings disclosure. Palantir would be releasing their earnings report on 06 May 2024 after the market close.

Market is expecting the company's earnings per share (EPS) projected to be $0.08, reflecting a 60% increase from the same quarter last year. Revenue is expecting to come in at $614.88 million, showing a 17.08% escalation compared to the year-ago quarter.

The full-year estimates for Palantir are expected to be at earnings of $0.33 per share and revenue of $2.68 billion. These results would represent year-over-year changes of +32% and +20.56%, respectively.

I think what would be important to look out for investors would be the effects of the Artificial Intelligence Platform (AIP) workshops, can these effects translate to better sales and earnings for Palantir?

Catalyst From AIP Workshop On Palantir AIP Workshop

Palantir's Artificial Intelligence Platform (AIP) workshops have been successful in generating revenue and accelerating adoption of their technology. I believe the upcoming earnings report is expected to show continued growth for Palantir, driven by the increasing demand for AIP and their Foundry software.

The company's approach of showcasing AIP's capabilities through workshops and customer conferences has been highly effective in acquiring new customers and expanding their client base.

On 06 Mar 2024, Palantir Technologies (PLTR) announces over 60 customers showcasing their work in the Artificial Intelligence Platform (AIP) at AIPCon, with the unveiling of 20+ new customers & partners. AIP Bootcamps have seen 850 completions globally, with notable customers like Lennar, General Mills, and OpenAI presenting at the event.

Concerns About Palantir Valuation and Future Growth

Palantir stock have been trading rangebound after a surge post earnings in February, and we could see that Palantir is below the $25 per share during the February time frame. It has been trading pretty low in April itself.

There have been concerns raised once again for its valuation and future growth and this has affected not only Palantir but other AI (Artificial Intelligence) stocks across the board. But if we looked at how the AI stocks have performed after their earnings over the last 2 weeks. How have they performed?

$Alphabet(GOOGL)$ stock jumps after their earnings beat, and there is mention of new AI demand powering their earnings increase.

If we looked at the weekly sentiment for Palantir, we can see that sentiment score is low before the earnings of AI stocks like Google, Microsoft. And the sentiment rise after that, what does this tell us?

This would mean that market is still confident that AI demand, regardless of whether it is hardware or software provider, the demand for AI would only increase. So with new customer acquisition by Palantir at AIPCon, we will now focus on how much revenues does these customers going to bring in?

Price Target Rather Wide Ranged

Based on tradingview data, where 15 analysts offering 1 year price forecasts for Palantir have a maximum estimate of $35 and a minimum estimate of $5.

If we look at how Palantir have been trading, we could see that it is actually having an average of around $20.00

Question whether Palantir would provide another surge after its earnings result would depend on how their commercial revenue do, while Palantir previously worked extensively with government agencies, it grew commercial sales by 70% in Q4. It ended 2023 with 221 commercial customers, up from 143 customers in 2022, indicating a 55% growth rate. Palantir expects U.S. commercial revenue to exceed $640 million in 2024, representing a 40% growth rate from 2023. 

The company’s Q4 results reflect the strength of its software portfolio and the surging demand it is experiencing across sectors and industries for its AIP, which is capable of integrating with existing infrastructure.

The mean target price for PLTR stock is $20.69, which is 6.5% below Friday (03 May)'s closing price. Given the low expectations surrounding the stock, PLTR can likely once again skyrocket if it beats estimates in Q1 of 2024.

More Conservative Price Target

While the overvaluation and future growth concerns might linger in the immediate term. We need to follow the recent development of how Palantir is going to make money from newly acquired customers for AIP.

Hence, I would think if the upcoming earnings surprise, we could see Palantir going to $26 and above, but if the earnings disappoint or even outlook for 2024 seen to be losing customers or market share, then Palantir could go towards $16 and below.

If we looked at the trading pattern next, we could have some clues on what the market is feeling towards Palantir.

Palantir Bullish Reversal After Demand Came Back

As seen in the chart below, from mid-March to end-April, we could see Palantir trading in a declining wedge, as we understand that in order to see a bullish reversal, we would need demand (buying) sentiment to come back.

And Palantir did show that at the beginning of May 2024, as we could see MACD crossover formed in the last week of April, where AI stocks earnings are coming in, demand (buying) also picked up.

We saw a consistent demand pick as seen in KDJ indicator, this is very encouraging, but do note that there is a sell signal from KDJ, when the demand disappear and selling began to come in (this is due to the reignite of valuation and future growth for Palantir again).

So I personally feel that this pattern might continue after the earnings, but whether Palantir could beat the EPS estimate comfortably, would be key to reassure investors that valuation and future growth concerns is overblown.

Summary

Palantir valuation and future growth remains somethings that traders and investors are still weighing this concerns, but I would think that the Palantir AIP workshop report card would be more worthwhile to focus.

How much current and future revenue and earnings can the AIP workshop bring Palantir would help to ease the concerns of valuation. I would be looking closely on this area, as I have some positions on Palantir,

Appreciate if you could share your thoughts in the comment section whether you think Palantir would skyrocket if it beats estimates for Q1 earnings of 2024?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.