"When the company reported Q3 earnings on Nov. 3, it beat on the top and bottom lines with EPS of 21 cents versus 17 cents expected, and revenue of $1.18 billion versus $1.09 billion expected. Palantir issued strong guidance, attributing growth to adoption of its AI software platform. Meanwhile, it announced that government sales - which have been essential to Palantir's rise - grew 52% from the same quarter a year ago."
"That comes not he back of an announcement in early August that the U.S. Army is consolidating 75 contracts into a single 10-year arrangement with Palantir valued at $10 billion. However, the so-called smart money have been selling the stock in flurries lately, leaving Palantir's institutional ownership at just 54.69%. JPMorgan, for example, recently reduced its position in PLTR by more than 32%, while T. Rowe Price reduced its position by nearly 24%."
"While the stock's forward P/E ratio of 161.29 can be concerning, Palantir's federal contracts and aerospace ties are expected to continue fueling growth. While earnings are rear-facing, the emerging trends seen in the company's Q3 results can serve as a foundation for further rewards for shareholders. However, PLTR's market multiple implies it could take an investor nearly half a century to recover their initial investment, assuming earnings remained constant."
Palantir's shares have rallied since its October 2022 IPO but retraced over 21% from an all-time high on Nov. 3. Q3 results showed EPS of $0.21 versus $0.17 expected and revenue of $1.18 billion versus $1.09 billion expected, with management attributing growth to adoption of its AI software platform and government sales up 52% year-over-year. Reported contracts include a £1.5 billion U.K. defense deal and a U.S. Army consolidation into a single 10-year, $10 billion arrangement. Institutional ownership has declined to about 54.69% after large reductions by JPMorgan and T. Rowe Price. The forward P/E near 161 signals stretched valuation despite expectations of future earnings growth.
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