With almost 30% gain on a YTD price chart, Palantir (NYSE: PLTR) is one of the better-performing companies on the stock market, managing to achieve an impressive feat of increasing PLTR stock value by more than 126% since its IPO just three years ago.
Technical analysis of PLTR stock
Over the past month, PLTR has traded within a range of $20.50 to $25.36 and is currently near the lower end. Although PLTR is trading in the middle of its 52-week range, it is lagging behind the S&P 500 Index, which is near new highs.
PLTR has a support zone between $20.88 and $21.12, formed by multiple trend lines across different time frames. It also faces a resistance zone between $21.76 and $21.92, created by a combination of trend lines and moving averages.
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Additionally, the stock is trading below its 10, 20, and 50-day simple moving averages.
Now, with the fundamentals becoming more robust, the Q1 report is another one in line. It beat analyst expectations with reported adjusted earnings per share of $0.08, matching expectations, and revenues of $634 million, surpassing the anticipated $625 million.
Weaker-than-expected guidance didn’t help Palantir
The firm, known for developing big data and artificial intelligence software for governments and corporations worldwide, also provided guidance for the second quarter and full year.
Palantir expects current-quarter revenue to range between $649 million and $653 million, slightly below the $653 million expected.
For the full year, the company projected revenue between $2.68 billion and $2.69 billion, which is lower than the consensus estimate of $2.71 billion.
Despite a solid revenue beat for the first quarter and significant success in marketing its AI products to the government and private sectors, Palantir’s full-year guidance fell short of expectations.
Earlier this year, the company secured a $178 million contract with the U.S. Army to help develop a next-generation, field-deployable sensor station. However, Wall Street wants less dependence on government funding, which made up 52% of Palantir’s $634 million revenue.
Wall Street remains cautious about PLTR stock
Despite the earnings beat, Wall Street doesn’t seem sold yet on PLTR stock, with analysts from TipRanks assigning a ‘hold’ rating. Of 12 examinations, two recommend a ‘buy,’ seven to ‘hold,’ and three to ‘sell.’
The average price target for PLTR stock is $21.89, representing only a 3.40% upside from the current price level.
However, analysts from large financial institutions believe there is more room for growth than the average prediction, deeming it too low.
Bank of America’s Mariana Perez Mora believes Palantir is uniquely positioned to capitalize on the growing commercial and government demand for AI products. Perez Mora rates the stock as a ‘buy’ with a price target of $28, suggesting a 36% increase from its current price.
On May 7, Citi updated its outlook on Palantir, raising the price target from $23 to $25 while maintaining a ‘neutral’ rating. This reflects a more optimistic view of the company’s U.S. commercial business and profitability.
Similarly, on May 7, HSBC’s Stephen Bersey increased his price target for Palantir from $22 to $23, a 4.5% rise, while maintaining a ‘hold’ rating on the stock.
Traders will find out in the next 12 months whether Palantir manages to surpass the average and soar to the levels analysts expect it to.
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