Palantir Technologies ( PLTR ) stock is tumbling Tuesday after the software provider reported strong first-quarter results late Monday, but provided soft guidance for the full year. Still, one analyst says PLTR's growth story remains intact.
In the three months ended March 31 , Palantir said its revenue was up 21% year-over-year to $634.3 million. Earnings per share (EPS) improved to 8 cents per share from 5 cents per share in the year-ago period.
The top-line results exceeded analysts' expectations while the bottom line matched forecasts. According to CNBC , Wall Street had expected revenue of $625 million and earnings of 8 cents per share.
"Our business is now growing at a scale and pace that even our most ardent advocates would have been hard pressed to say was likely, or even possible," Palantir chief executive officer Alex Karp wrote in a May 6 letter to shareholders . "We anticipate that our U.S. commercial business, which accounted for 24% of our revenue last quarter, will remain one of the most significant drivers of our growth in the near term."
As a result of its strong performance in the first quarter, Palantir raised its full-year outlook. The company now expects revenue in the range of $2.677 billion to $2.689 billion, up from i ts previous outlook of $2.652 billion to $2.668 billion.
However, Wall Street wants more, which likely explains the post-earnings slump for the tech stock . According to CNBC, expectations are for full-year revenue of approximately $2.71 billion.
Where does Palantir stock stand with analysts?
Palantir stock has been a standout on the charts over the past 12 months, nearly tripling in value. Wedbush analyst Daniel Ives sees even more upside for PLTR, as evidenced by his Buy rating and $35 price target which represents implied upside of roughly 62% to current levels.
Ives says he sees "increased momentum" in the stock's growth story thanks to its Artificial Intelligence Platform. "AIP [is] leading the charge in generating significant demand across both commercial and government landscapes while [being] well-positioned to gain a larger share of this $1 trillion opportunity taking place with AI use cases exploding globally," the analyst said in a May 7 report.
Overall, most analysts are on the sidelines when it comes to the AI stock . According to S&P Global Market Intelligence , analysts' average target price for Palantir is $21.13, representing implied downside of about 2% to current levels. Additionally, the consensus recommendation is Hold.
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