Palantir Technologies, Inc. (NASDAQ:PLTR) steps into the spotlight with its fourth-quarter earnings report after Monday's closing bell, but it's bringing some baggage.
While the stock has nearly doubled over the last year, January was a rough month—shares fell 19% as investors grew nervous about the AI trade and Palantir's high price tag.
RBC's Warning
RBC Capital Markets analyst Rishi Jaluria maintained his skepticism last week with a Sell rating and $50 price target, representing a nearly 70% potential downside from current levels.
Jaluria argued that Palantir stock is overdue for a reality check, according to TipRanks.
The analyst's three main red flags:
Government Cooling: RBC's internal data suggests that the value of new government contracts is shrinking, even if global chaos keeps Palantir relevant in the long run.
Commercial Fatigue: Jaluria said there are whispers that the initial gold rush for Palantir's commercial tools are slowing, with some customers looking at cheaper competitors.
Cash Hoarding: Palantir is sitting on an immense cash pile with no plans to give back to shareholders through dividends or buybacks. Jaluria thinks retail investors are starting to lose patience.
The High Bar for Success
Despite RBC's skepticism, the expectations for Palantir's Q4 are massive. To keep the bulls happy, Palantir needs to hit some aggressive targets:
- Earnings: Wall Street wants to see 23 cents per share, a massive 64% jump from last year.
- Revenue: The goal is $1.34 billion, which would be a 62% increase.
The Bottom Line: RBC thinks the risk of Palantir stock crashing is much higher than the chance of it climbing further, calling the current setup “skewed to the downside.”
Other analysts are not as pessimistic and the stock has an average price target of $195.28, according to data from Benzinga Pro.
Notable recent analyst calls include:
- Phillip Securities initiated PLTR with Buy and a $208 price target on Jan. 22.
- Citigroup upgraded Palantir shares to Buy and raised the price target from $210 to $235 on Jan. 12.
- Truist initiated coverage on PLTR with a Buy rating and a price target of $223.00 on Jan. 6.
PLTR Price Action: According to data from Benzinga Pro, Palantir stock was up 2.59% at $150.39 at the time of publication Monday morning.
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