Palantir analyst: “We acknowledge that we were wrong”
Morgan Stanley analysts, who have been some of Wall Street’s most outspoken skeptics on the run-up in the share price of Palantir, modified some of their views in the aftermath of the company’s knockout Q4 results.
Sanjit Singh, the lead analyst on the shares, upgraded his view from “underweight” to “equal weight” — effectively a move from “sell” to “hold” — and raised his price target on the shares from $60 to $95, writing:
“Our concerns on valuation at ~50x CY26 sales and on the potential for slower growth in 2025 given tougher YoY compares suggested that the risk/reward was unattractive leading to our UW rating. However, one of the key principles of growth investing in software is before looking to valuation, to first assess whether the business is getting better or worse and, if getting better, to ask how durable that improvement is going forward.”
The business, he concluded, is clearly getting better, succinctly evinced by the 36% year-on-year revenue growth the company produced in Q4.
“Despite an Ultra Premium Valuation, We See Lack of Downside Catalysts Over The Next 3-4 Quarters. Given the strength of the outlook, we acknowledge that we were wrong about our core fundamental catalyst of slowing growth below the 30% level due to the tougher compares in 2025. This leaves us with valuation as the primary remaining concern.”
Of course, valuation remains a worry for many of the analysts covering the shares. But the sheer force of the company’s recent results seems to be forcing some analysts to bite the bullet and change their views.
