What Analysts Think of Palantir Stock Ahead of Earnings

Palantir Technologies (PLTR) is set to report fourth-quarter results after the market closes Monday, with analysts largely skeptical on whether the analytics software provider’s stock can sustain its recent momentum.

None of the 13 analysts covering the stock tracked by Visible Alpha expect the stock has further to rise, with their consensus price target of $50 almost 40% below the stock’s record-high close at $82.49 Friday amid some concerns it could be overvalued.

Shares of Palantir rose 1.6% Friday, and have nearly quintupled in value over the past 12 months as demand surged for the company’s Artificial Intelligence Platform.

Wedbush analysts, who are more bullish on the stock than those polled by Visible Alpha, recently raised their price target to $90 from $75, and said they believe Palantir “has a path to become the next Oracle or Salesforce over the coming years,” adding they believe Wall Street is underestimating the revenue potential of Palantir’s Artificial Intelligence Platform.

However, others like Jefferies, which on Thursday maintained an “underperform” rating and price target of $28, have suggested the stock is trading at such a high premium that “any signs of decelerating growth could cause concern.”

Palantir is expected to report fourth-quarter revenue of nearly $775 million, up 27% year-over-year, and earnings of $83.51 million, or 3 cents per share, down from $96.91 million, or 4 cents per share, a year earlier. However, earnings after adjustment are expected to rise 35% to $273.79 million, or 11 cents per share. Wedbush projected Palantir could face a one-time impact to the tune of $120 million in stock-based compensation expenses.

In the third quarter, Palantir had reported better-than-expected results and raised its revenue guidance for the last quarter of the year.