Palantir (PLTR) Stock: Why Analysts See 51% Upside Despite Six-Month Slide

TLDR

• Palantir reports Q4 earnings Monday with analysts expecting 23 cents adjusted EPS and $1.34 billion revenue, up 62% year-over-year
• U.S. revenue projected to hit $1 billion for the first time, surging 80% with commercial sales climbing 121%
• Company unveiled Chain Reaction OS in December with Nvidia partnership to modernize AI infrastructure for utilities and data centers
• Secured $448 million Navy contract for ShipOS program and renewed France DGSI partnership, while expanding HD Hyundai deal in January
• Trading at forward P/E of 180 with 46% free-cash-flow margin but faces 8.8% six-month decline despite strong fundamentals

Palantir reports fourth-quarter earnings Monday afternoon with Wall Street watching closely. Analysts expect adjusted earnings of 23 cents per share, up from 14 cents last year.

Palantir Technologies Inc., PLTR

Revenue forecasts sit at $1.34 billion. That’s a 62% jump from 2024.

The data analytics firm helps organizations use AI to interpret massive data sets. Its software reveals patterns and action plans that decision-makers might otherwise miss.

U.S. revenue looks set to cross $1 billion in quarterly sales for the first time. Analysts project an 80% surge in the fourth quarter.

Commercial sales are driving much of that growth. They’re expected to rise 121%.

Those numbers mirror the momentum from last quarter. U.S. revenue now represents roughly three-quarters of Palantir’s total, up from 67% a year ago.

The company’s defense and intelligence roots remain strong. In December, Palantir landed a Navy contract worth up to $448 million.

New Infrastructure Play Targets Power and Compute Bottlenecks

The ShipOS program deploys Palantir’s Foundry and AI Platform across shipbuilding operations. Early pilots reportedly cut planning timelines from weeks to minutes.

The rollout will expand to submarine builders and critical suppliers. France’s DGSI also renewed its three-year contract with Palantir in December, extending a relationship that spans nearly a decade.

Chain Reaction represents Palantir’s newest initiative. Launched in December, the operating system tackles AI infrastructure constraints around power and compute capacity.

The platform helps utilities, data centers, and energy producers modernize aging systems. It also supports grid expansion to handle demand from electrification and hyperscale data centers.

Nvidia and CenterPoint Energy joined as founding partners. Their involvement lends technical credibility to the project.

Commercial Expansion Continues With HD Hyundai Deal

Palantir broadened its HD Hyundai partnership in January. The expansion extends AI and Foundry capabilities to more subsidiaries including electric systems, robotics, and marine services.

Management positioned the move as driving cross-subsidiary coordination and automated decision support. The platform aims to improve efficiency in maintenance and supply chain planning.

Third-quarter results beat expectations handily. Revenue hit $1.18 billion versus analyst estimates of $1.09 billion.

Adjusted earnings came in at 21 cents per share. U.S. revenue grew 77% year-over-year.

For the fourth quarter, Palantir guided to revenue between $1.327 billion and $1.331 billion. That’s well above the original Wall Street consensus of $1.19 billion.

The company posted a 46% free-cash-flow margin over the last 12 months. Its cash reserves keep growing.

Palantir stands out among fast-growing software companies for maintaining strong profitability. Few question the company’s growth runway in commercial markets.

The stock trades at a forward price-to-earnings multiple around 180. That puts it among the market’s most expensive stocks, though still trailing Tesla’s roughly 209 multiple.

A large retail investor base supports both stocks. These shareholders believe strongly in the companies and push share prices higher.

Shares have dropped 8.8% over the past six months. The stock dipped 1.7% in pre-market trading.

Analysts maintain a consensus price target of $163.08. Their latest ratings suggest roughly 51% upside from current levels.

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