Palantir up as Wall Street gushes about Q4 report
But will retail reengage with the shares?
Palantir’s Q4 numbers shook the stock out of a monthslong stupor Monday after the bell, and since then, Wall Street analysts have been churning out a series of laudatory reviews of the company’s performance.
Here’s a smattering of some of the details of the report that analysts were smitten with.
First off, growth continued to surge, with Morgan Stanley writing:
“Palantir delivered its fastest revenue growth as a public company with revenue accelerating to +70% YoY from +63%/+48% Q3/Q2 — well ahead of consensus looking for growth of +62%.”
Citigroup analysts spotlighted several measures of Palantir’s fattening profit margin. They included operating margin — a broad gauge of how profitable the company’s core business is, absent key costs like interest payments and taxes — and free cash flow margin, a more reality-based measure of how well the company has actually turned sales dollars into profits in the form of cold, hard cash. Citi analysts wrote:
“Operating margins were an impressive 57%, beating guidance by 456 bps and contributing to a rule of 40 score of 127%. OCF of $777m beat citi/consensus $593M/569M and adj FCF margin was 55% (up 9 pts sequentially).”
And the orders seem to be piling up, with the company reporting some $4.26 billion in bookings — which Palantir classifies as total contract value, or TCV — rising 138% from Q4 2024.
Much of that reflects Palantir’s progress in selling its AI software platform, AIP, to US corporations.
RBC Capital wrote:
“Bookings strength skewed toward large, multi-year AIP deals. Q4 TCV reached a record $4.26B (+138% YoY), including $1.34B of U.S. Commercial TCV (+67% YoY). The company closed 180 deals of at least $1M, including 61 above $10M. U.S. Commercial remaining deal value grew 145% YoY to $4.38B, though longer contract durations continue to inflate TCV and reduce visibility into normalized run-rate growth.”
All told, Wall Street seems more than satisfied with Palantir’s results.
But while the stock is up Tuesday, it remains to be seen if the retail crowd — a massive driver of Palantir’s more than 1,700% gain over the last three years — will be energized by the company’s bonkers operational performance.
Palantir remains down some 25% from its record high reached on November 3. Since then, a number of other high-flying retail favorites — Sandisk springs to mind — have emerged as new focuses for regular traders, perhaps claiming some of loyalty that once was reserved for Karp and co.
