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Should You Add Palantir Stock to Your Portfolio Pre-Q4 Earnings?

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Palantir Technologies Inc. (PLTR - Free Report) will report its fourth-quarter 2024 results on Feb. 3, after market close.

The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at 11 cents, indicating 37.5% growth from the year-ago reported quarter. The consensus estimate for total revenues is pinned at $778.9 million, implying 28% year-over-year growth.

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The company has an impressive earnings surprise history. In two of the trailing four quarters, earnings surpassed the Zacks Consensus Estimate and matched in the remaining two, with an earnings surprise of 5.9%, on average.

Palantir Technologies Inc. Price and EPS Surprise

 

Palantir Technologies Inc. Price and EPS Surprise

Palantir Technologies Inc. price-eps-surprise | Palantir Technologies Inc. Quote

PLTR’s Lesser Chance of Q4 Earnings Beat

Our proven model does not conclusively predict an earnings beat for Palantir this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

PLTR has an Earnings ESP of -1.00% and sports a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Customer Base Expansion to Have Been PLTR’s Driver in Q4

The company’s top line is likely to have been driven by robust business opportunities from existing and new clients, facilitating the Commercial and Government segments to prosper. The consensus mark for Commercial revenues is $358.3 million, suggesting 26% year-over-year growth. The consensus estimate for Government revenues is $425.7 million, indicating 31.4% year-over-year growth.

PLTR Stock Soars

Palantir shares have skyrocketed 180.1% in the past six months. It has significantly outpaced the 42.2% rise of its industry and the 11.4% rally of the Zacks S&P 500 composite.

Six-Month Price Performance

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

PLTR has outperformed its industry peers Adeia Inc. (ADEA - Free Report) and GigaCloud Technology Inc. (GCT - Free Report) . ADEA has gained 13.5%, while GCT has declined 30.8% over the same period.

Palantir’s Investment Considerations

PLTR leverages its Foundry and Gotham platforms to promote AI adoption across the government and commercial sectors. Its excellence in AI-driven information warfare and cybersecurity drives consistent growth amid dynamic global security demands. In the government sector, Palantir utilizes its AI strategy to assist U.S. Defense. In the commercial space, the company uses AI platform (AIP) and machine learning (ML) capabilities to help businesses gain crucial insights from their data.

In the third quarter of 2024, Palantir’s government revenues grew 40% year over year, driven by strong demand for Maven Smart System’s AI and ML capabilities across the U.S. military, including the Army, Space Force, U.S. Marine Corps, Navy and Air Force.

The U.S. commercial revenues also jumped 54% year over year, driven by exceptional demand for AIP, resulting in client acquisitions and existing customers as the company deployed AI models in production.

Effective cost management practices resulted in a whopping 182% year-over-year jump in operating income. The adjusted operating margin surged 900 basis points during the same period.

Buy Palantir This Earnings Seasons

PLTR is witnessing strong top-line growth, driven by client wins and customer base expansion. The government and commercial segments are growing on the back of strong demand for AI products. Effective cost management practices are yielding significant margin enhancements.

The confluence of these factors paves a path for continued success for the company. We believe investors looking to gain exposure in the booming AI market this earnings season should buy Palantir stock now.


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