Palantir Earnings Day Is Here. The Focus Is On AI
$Palantir Technologies Inc.(PLTR)$
Investors will get fresh insights on how Palantir's AI push is going when the company reports first-quarter financial results after the close of trading on Monday.
Palantir's fourth-quarter results were impressive, driven by strength in the company's U.S. commercial business, which were, as CEO Alex Karp put it in an interview with Barron's three months ago, "bombastic, baller, incomprehensibly good." Palantir's fourth-quarter commercial revenue was $284 million, up 32%, with 70% growth in the U.S. commercial business.
The strong quarter spurred a one-day 30% jump in Palantir's stock price.
For the first quarter, which ended in March, Palantir has projected revenue of between $612 million and $616 million, with adjusted income from operations between $196 million and $200 million. Wall Street consensus estimates as tracked by FactSet call for revenue of $615 million, up 17%, $198 million in operating income, and adjusted earnings per share of eight cents.
The Street expects the company to report commercial segment revenue of $292 million, which would be up 24%, with government segment revenue of $322 million, up 11%.
For 2024, Palantir has projected revenue of between $2.652 billion and $2.668 billion; analysts are at $2.673 billion, 20% above the 2023 level. Palantir sees full-year adjusted income from operations ranging between $834 million and $850 million. Last quarter, the company said that U.S. commercial revenue growth for the year will be at least 40%. Palantir projected 2024 adjusted free cash flow of between $800 million and $1 billion.
Citi analyst Tyler Radke, who has a Hold rating on Palantir shares, on Friday inched up his target price on the stock to $23, from $20. Radke, who recently backed off a longstanding Sell recommendation on the stock, wrote in a note previewing the quarter that strength in AIP -- an acronym for Artificial Intelligence Platform, which is what Palantir calls its AI software -- could offset some weakness in the government side of the business. "We see room for a small 1% topline beat in Q1 and healthy profitability upside," Radke writes.
For the June quarter, Street consensus estimates call for revenue of $643 million, up 21%, with adjusted operating income of $201 million, and profits of eight cents a share on an adjusted basis.
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