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Buy the Surge in Palantir Technologies (PLTR) Stock After Q4 Earnings?

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Rising over +20% in Wednesday’s trading session, Palantir Technologies (PLTR - Free Report)  stock has been a highlight of this week’s earnings lineup after reporting strong Q4 results yesterday evening.

Palantir has garnished Wall Street's attention as its artificial intelligence platform (AIP) is seeing high demand with PLTR spiking to over $100 and now up +500% in the last year.

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Palantir’s Strong Q4 Results

Primarily providing software platforms that assist with counterterrorism investigations, Palantir AIP appears to be drawing interest from more traditional enterprises as well.   

Stating its U.S. business is at the forefront of the AI revolution, Palantir’s Q4 sales spiked 36% year over year to $827.52 million compared to $608.35 million in the comparative quarter. Drawing Wall Street’s attention, Palantir comfortably exceeded Q4 sales estimates of $777.49 million and saw its top line stretch 14% sequentially.

The company’s operational efficiency also stood out with Palantir generating $460 million in cash from operations and $517 million in adjusted free cash flow, representing margins of 56% and 63% respectively. Furthermore, Q4 EPS of $0.14 beat expectations of $0.11 and rose from $0.08 a share in the prior period. Palantir has reached or exceeded the Zacks EPS consensus for nine consecutive quarters with an average earnings surprise of 12.72% in its last four quarterly reports.

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Full Year Results

Rounding out fiscal 2024, Palantir’s total sales spiked 29% to $2.87 billion from $2.22 billion in 2023. Moving further past the profitability line, annual earnings soared to $0.41 per share from EPS of $0.08 in 2023.  

Palantir’s full-year cash from operations was $1.15 billion with adjusted free cash flow at $1.25 billion, margins of 40% and 44% respectively.

 

Palantir’s Positive Revenue Guidance

For Q1 FY25, Palantir expects revenue between $858-$862 million which came in well above the current Zacks Consensus of $797.85 million or 26% growth (Current QTR below). For the full year, Palantir expects FY25 sales between $3.741 billion-$3.757 billion, topping the consensus forecast of $3.54 billion or 23% growth.

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Takeaway 

The incredible rally in Palantir Technologies stock could continue thanks to its better-than-expected Q4 report and guidance. Sporting a Zacks Rank #2 (Buy), earnings estimate revisions are likely to trend higher for Palantir in the coming weeks and the company’s balance sheet is strengthening thanks to its growing cash pile.


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