Analysts cautious on Palantir due to high valuation concerns ahead of Q2 earnings report

From Nasdaq: 2024-07-22 09:05:59

The AI market has grown to over $184 billion, expected to hit $826 billion by 2030. Companies like Palantir (PLTR) are benefiting, with the stock up 66% year-to-date. But, analysts are cautious ahead of the Q2 earnings report. PLTR’s price-to-sales ratio is 23.64, leading to concerns about overvaluation and growth sustainability.

Palantir’s Q1 2024 earnings beat expectations but the stock dropped 7%. Analysts are split on PLTR, with Mizuho downgrading to “Underperform” citing low-quality earnings. However, Barchart’s Mark Hake is bullish, projecting a 30% free cash flow margin by 2025. Analysts are divided on PLTR, with a mean price target of $22.07 suggesting overvaluation.

Palantir’s Q2 2024 earnings report is due on Aug. 5. Analysts predict an EPS of $0.04 and revenue of $652.47 million for the quarter. The company is forging partnerships in AI and space technology sectors, aiming to enhance efficiency and innovation. With growth in U.S. commercial revenue and significant deals, Palantir is poised for success.

Despite its strong performance, Palantir faces skepticism from analysts due to its high valuation and limited earnings visibility. Investors should exercise caution as the stock approaches its Q2 earnings report. Bulls point to AI potential and partnerships as reasons for optimism, but the mixed analyst ratings suggest a turbulent path ahead for Palantir.



Read more at Nasdaq: Why One Analyst Says Palantir Stock is a Sell Ahead of Earnings