Does PLTR Stock Have a Gluttonous Valuation?
The AI rally is far from over, and this will greatly benefit PLTR stock. Not only that, but the company’s new deal is another example of its inroads into the commercial sector, which has seen strong growth recently. In fact, this segment had 27% revenue growth in Q1 to $299 million, with U.S. commercial growth of 40% to $150 million.
Palantir is seeing more types of industries adopt its analytical and AIP solutions, and this is evidenced by the 69% growth in U.S. commercial customers it saw in the quarter. To help draw in commercial customers, the company puts together boot camps to quickly teach them the skills they need to employ AIP and solve their own complex issues.
But even though the company’s commercial business is booming, we can’t say the same for its government business. Palantir’s government revenue growth has slowed, particularly with the U.S. government. In fact, government revenue grew 16% in Q1 to $335 million, with U.S. government growth of 12% to $257 million.
That growth isn’t bad, but for a company valued at a forward price-to-sales multiple of 21 times, overall revenue growth of 21% might not be enough for some to justify that valuation. This is why Monness, Crespi, Hardt & Co. analyst Brian White downgraded Palantir to Sell from Neutral, and issued a $20 price target.
Argus’ Take on PLTR Stock
