Palantir: Be Fearful When Others Are Greedy (Rating Downgrade)

Summary:

  • Palantir’s Q3’24 earnings exceeded expectations, driven by strong AI demand, leading to a raised FY 2024 outlook and 30% Y/Y revenue growth.
  • Palantir’s U.S. commercial revenues surged 54% Y/Y, with U.S. government revenues up 40% Y/Y, highlighting robust AI product adoption.
  • The analytics company also saw a significant expansion in its free cash flow margin.
  • Insider stock sales and a high valuation at a 28X forward price-to-revenue ratio remain concerns.
  • Despite impressive earnings and growth, PLTR’s valuation concerns justify a sell rating at this point.

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Palantir (NYSE:PLTR) reported better-than-expected earnings for Q3’24 on Monday, topping both EPS and top-line estimates due to strong tailwinds for AI adoption, in both of its core businesses. The earnings report caused shares of the firm to soar


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