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Palantir Technologies (NASDAQ:PLTR) shares tumbled more than 12% on Tuesday, despite the company reporting stronger year-on-year earnings and raising full-year guidance, The decline followed a sharp rally in recent months that had lifted the stock to its highest level since February.
The big data analytics firm posted adjusted earnings of $0.13 per share for the fiscal first quarter ended March 31, up from $0.08 a year earlier. Revenue rose 39% to $883.9 million, topping the analyst forecast of $862.2 million, according to FactSet. U.S. revenue surged 55% to $828 million, fueled by a 71% jump in commercial business and a 45% gain in government contracts.
Palantir signed 139 contracts valued at over $1 million during the quarter, with 31 deals above $10 million. Remaining deal value in the U.S. commercial segment rose 127% to $2.32 billion.
Despite upbeat metrics and new AI tools, including integration of Grok-2 models and a tie-up with Databricks, shares pulled back after gaining 64% year to date. Investors appeared to have priced in stronger upside.
The company now expects fiscal Q2 revenue between $934 million and $938 million and full-year sales of up to $3.902 billion.
Is PLTR Stock a Buy After Earnings?
Based on the one year price targets offered by 20 analysts, the average target price for Palantir Technologies Inc is $94.65 with a high estimate of $130.00 and a low estimate of $40.00. The average target implies a downside of -23.53% from the current price of $123.77.
Palantir Technologies Inc's share price is $123.77. Its GF Value is $20.91. Based on the relationship between the current stock price and the GF Value, GuruFocus believes Palantir Technologies stock is "Significantly Overvalued". For deeper insights, visit Palantir's Valuation page.
This article first appeared on GuruFocus.