$Palantir Technologies Inc.(PLTR)$ is expected to release its fiscal Q1 2025 earnings, and analysts anticipate significant year-over-year growth for Q1 2025.
Estimates vary slightly, but generally point towards:
Revenue: Around $864 million (approx. 36% YoY growth).
Earnings Per Share (EPS): Estimates range from $0.08 to $0.13 (representing substantial YoY growth, potentially 62% to 100% depending on the specific consensus figure used). This expected growth is linked to the traction of Palantir's platforms, especially AIP.
Palantir (PLTR) Last Positive Earnings Saw Its Share Price Gain 34.68%
Palantir had a positive earnings call on 03 Feb 2025 which saw its share price gain 34.68%.
The earnings call reflected a strong positive sentiment with significant revenue growth, especially in the U.S. market, driven by the AI revolution and strong government contracts. Despite some challenges in Europe and a decline in strategic contract revenue, the overall performance was exceptional, marked by record operating margins and high net dollar retention.
Palantir (PLTR) Guidance
In the Palantir Fourth Quarter 2024 Earnings Call, the company reported impressive financial metrics and growth figures. Palantir achieved a 36% year-over-year revenue increase in Q4 and a 29% rise for the full year, with U.S. business driving much of this success. The U.S. commercial revenue grew by 64% year-over-year and 20% sequentially in Q4. Additionally, the company closed $1.8 billion in total contract value (TCV) during the quarter, marking a 56% increase year-over-year. Palantir's Rule of 40 score surged to 81, and they reported a record $517 million in adjusted free cash flow for Q4, representing a 63% margin. For fiscal year 2025, they are guiding to a midpoint revenue of $3.749 billion, reflecting a growth rate of 31%.
Despite the challenges, Palantir's unique positioning in the AI and enterprise software landscapes, particularly through its ontology framework, continues to drive significant demand and expansion opportunities.
Focus on Artificial Intelligence Platform (AIP)
Palantir's AIP is considered a significant growth driver, enabling organizations to integrate their data with large language models. Strong performance in recent quarters, especially in the US commercial sector (which saw 64% YoY growth in Q4 2024), has been largely attributed to AIP adoption. Investors and analysts will be keenly watching for continued momentum in AIP adoption, potentially reflected in accelerating commercial revenue growth and new customer acquisition, particularly from initiatives like the "AIP bootcamps".
Key Metrics to Watch For Palantir (PLTR) 05 May Earnings
Revenue grew 14% sequentially and 36% year-over-year in Q4, with full-year growth at 29% year-over-year. U.S. business led with a 52% year-over-year increase in Q4.
Adjusted operating margin expanded to 45%, the strongest in the company's history. Adjusted free cash flow for Q4 was $517 million, representing a 63% margin.
US Commercial Revenue Growth
Continued strong growth here would validate the success of AIP in expanding beyond government contracts.
Commercial Customer Count
An increase in the number of commercial clients indicates successful market penetration driven by new offerings.
Revenue from strategic commercial contracts expected to decline significantly in Q1 2025.
Strong Government and International Performance
U.S. government revenue grew 45% year-over-year. Notable deals include extensions with the U.S. Army and U.S. Special Operations Command.
Management Commentary
Pay close attention to discussions during the earnings call regarding AIP adoption rates, customer feedback, conversion rates from bootcamps, and the overall contribution of AI-driven revenue.
European operations saw a low growth rate of 4%, contrasting sharply with U.S. performance.
Contract Values
Growth in Total Contract Value (TCV) and Remaining Deal Value (RDV), especially in the commercial segment, signals strong future revenue potential from innovative platforms.
Closed $1.8 billion of TCV in Q4, a 56% increase year-over-year, with 32 deals worth $10 million or more. U.S. commercial revenue grew 64% year-over-year.
Net dollar retention was 120%, driven by expansions at existing customers and new customers acquired.
Palantir (PLTR) Price Target
Based on 18 Wall Street analysts offering 12 month price targets for Palantir Technologies in the last 3 months. The average price target is $93.69 with a high forecast of $125.00 and a low forecast of $40.00. The average price target represents a -16.93% change from the last price of $112.78.
Even though we are seeing some nice upside move over the past week, it is still 16,93% lower than its high forecast of $125, which will be important as investors confidence and conviction on Palantir stock would move the stock price in volatile mode.
I am expecting quite a big swing in the share price post its earnings. Will share more on the technical below.
Technical Analysis - Exponential Moving Average (EMA)
Daily Trend Saw Bulls Are Building Uptrend, could it be a bull trap?
On Thursday, we saw PLTR was up by 7% and it is making its ways back to the all-time high, which start to have investors wonder if it is like just yesterday that PLTR was down almost 50% from all-time highs at one point. But now PLTR is making good promises to deliver returns to investors.
The higher lows are now set at around $88.74 which saw a nice daily uptrend, so any pullback looking for this higher low would mean a possible further trend continuation, I would think that there is a nice around formed between the 50-day and 200-day period.
On Friday, we just have the bulls giving a 4.64% gain to cement a daily uptrend continuation, this could mean that we could be seeing the same trend happening next week building to its earnings call which would be in focus to see how is PLTR business expanding both government contracts and commercial contracts, analysts are expecting them to do well so this could well support a valuation at these multiples.
Weekly Trend Show Downside But It Is Beginning To Change
Last week we are seeing a weekly downtrend so nice engulfing move. Any pullbacks could mean looking for a weekly higher low for further trend continuation.
So PLTR managed to end this week on a weekly uptrend, which would mean that the valuation concern might be pushed aside, guess investors and analysts are looking to see if PLTR could expand both government contracts and commercial contracts to support the high valuation.
Summary
Looks like all indications suggest that Palantir's Q1 2025 earnings will heavily feature the impact of its innovations like AIP. The extent to which these innovations are driving growth and meeting high market expectations will be a primary focus for investors.
So I would be focusing on whether PLTR can really live up to its high valuation with a good expansion on both government and commercial contracts.
Appreciate if you could share your thoughts in the comment section whether you think Palantir would be benefitting from the disruptive innovation for its 05 May earnings call.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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