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shares of Palantir Technologies (PLTR -0.53%) According to data provided by S&P Global Market Intelligence, stocks rose significantly this week, soaring as much as 47.5%. Shares were up 43.2% as of Friday’s market close.
The data analytics and artificial intelligence (AI) systems pioneer’s initial boost was a result of better-than-expected results. But the stock rose further as Wall Street rushed to update its model and issued a slew of new, higher price targets.
blockbuster results
In the fourth quarter, Palantir had revenue of $608 million, up 20% year-over-year (9% sequentially). The results were driven by strong U.S. commercial revenue, which increased 70%.
The company also achieved record net income, marking its fifth consecutive quarter of earnings under generally accepted accounting principles (GAAP). As a result, adjusted earnings per share (EPS) was $0.08.
Revenue significantly exceeded Wall Street expectations, with analysts’ consensus estimates calling for revenue of $602.4 million and adjusted EPS of $0.08.
The company’s guidance also gained momentum. Palantir plans to generate $2.66 billion in revenue next year, up 20% year over year at the midpoint of its guidance. Management expects continued strong growth in U.S. commercial revenues; at least 40% growth, but the company tends to issue conservative guidance, so results could be even more bullish.
Wall Street is full
Immediately after Palantir announced its results, Wall Street analysts scrambled to update their financial models, resulting in a series of price targets and two rating upgrades.
Wedbush analyst Dan Ives raised his price target to a street high of $30, implying a 23% upside on top of this week’s impressive move. Ives seemed to capture the public mood, citing the “unexpected commercial success” of Palantir’s artificial intelligence platform (AIP) and the “spectacular” 70% growth in its U.S. commercial business. is. He called Palantir an “undiscovered gem” in AI.
Finally, we measure the company’s stock valuation by its price-to-earnings ratio (PEG), which shows it to be less than 1, which is the benchmark for undervalued stocks.
For these reasons and more, Palantir stock is a buy.
Danny Vena holds a position at Palantir Technologies. The Motley Fool owns a position in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
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