Palantir Stock Forecast: PLTR clobbers the naysayers with Q4 earnings

PLTR garners 31% surge on back of terrific Q4 results.
Palantir grew US commercial revenue by 70% YoY.
Margins expand as revenue gains 20% from a year ago.
Management raises full-year sales guidance.

Palantir (PLTR) stock appears to have turned a corner. On Tuesday it is worth nearly one-third more than it was on Monday after the big data firm shot up following successful fourth-quarter earnings results. PLTR stock closed up 30.8% at $21.87 following a slam dunk of an earnings release late Monday. Shares gave up less than 1% afterhours.

This performance was the best PLTR shareholders have ever seen. It outdid the former record from January 22, 2021, that saw a 25.4% gain.

A growing customer base and robust commercial revenue growth is making Palantir less reliant on government contracts. This shift is causing the market to swarm PLTR stock as it now looks more likely that Palantir has an extremely long growth ramp ahead.

All three major US indices gained on Tuesday as US Treasury yields sank. The Dow Jones added 0.37%, while the S&P 500 closed up 0.23%. The NASDAQ Composite rose 0.07%.

Palantir stock earnings news

Palantir saw revenue of $608.4 million in the fourth quarter, $5.6 million ahead of an already healthy Wall Street consensus. Revenue has grown nearly 20% from a year ago, and Palantir also met consensus for earnings with $0.08 in adjusted EPS (earnings per share).

Commercial revenue climbed 32% YoY to $284 million, but the real story is US-specific commercial revenue. That latter segment surged 70% YoY as Palantir’s offering on the artificial intelligence (AI) front exploded. US commercial customers rose 55% from a year ago.

Government revenue of $324 million rose 11% from a year ago, while total customer count for both the Government and Commercial segments rose 35%.

"[T]he AI Revolution is driving [AI Platform] deal flow to a level we did not expect until 2025," wrote Wedbush Securities analyst Dan Ives, who has a $25 price target on PLTR stock.

Even a notably skeptical analyst like Tyler Radke of Citi had to admit that Palantir had turned a corner. He raised his estimate of 2024 free cash flow by 55%.

Margins were the icing on the cake for Palantir. The company sports an adjusted free cash flow margin of 50%, an adjusted operating margin of 34%, and a GAAP profit margin of 15%.

Despite Q1 sales guidance that was slightly below consensus, Palantir raised the full-year forecast to between $2.652 billion and $2.66 billion.

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Palantir stock forecast

Before Tuesday’s new range high, Palantir stock was in a technical, short-term downtrend. This is because PLTR shares had been trending lower ever since hitting a range high at $21.85 on November 21 of last year.

The surge in the PLTR stock price will now give bulls hope for retesting the high-volume zone between $23 and $29 from the company’s first year of public trading, which lasted from 2020 to 2021.

Besides $21.85 offering support, the $20.24 high from August 1, 2023 might also be considered. The stock is trading well above its 20-day and 50-day Simple Moving Averages (SMAs), and it may trade with increased volatility until those SMAs close in on current price action.

PLTR daily stock chart

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