Palantir Earnings Incoming – What To Expect From PLTR

On a very red start to the trading week, markets are poised for Palantir's Q2 financial results, scheduled for release after the bell today. Analysts are expecting earnings per share of 8 cents and revenue of $652.42 million, an increase from last quarter's $634.34 million (a beat on expectations of $617.61m). These upcoming results will likely further insight into the company's financial health and future prospects.

After being hit hard on the open, gapping down to a low of $21.23, Palantir's stock price (NYSE: PLTR) has stabilised through the trading day so far, currently sitting at $23.73, almost 10% higher.

Regardless of the uptick, the stock price of the big data analytics firm has become a subject of caution amongst Wall Street experts.

Despite a notable 12.65% dip in the past five trading sessions, analysts warn of further potential downside. The underlying concern is Palantir's evolving valuation and its high Price-to-Earnings (P/E) ratio which have raised questions about the sustainability of its stock price level.

Matthew Broome, an analyst at Mizuho, has taken a bearish stance on Palantir's stock, downgrading it from “neutral” to “underperform” . Accompanying this downgrade, Broome adjusted the price target from $21 to $22, which suggests a mild downside risk from the current levels. The concerns primarily stem from the lack of visibility in Palantir's business operations and scepticism regarding the company's capacity to consistently deliver strong financial results.

Palantir shares have experienced a substantial upsurge of 43% year-to-date, which has ignited a debate over the justification of its high valuation multiple. With the rapid increase in share price, analysts argue that Palantir's stock has become excessively expensive to own, posing the question of whether the high valuation is sustainable in the long run.

On the flip side, not all analysts are pessimistic about Palantir's outlook. Wedbush analyst Dan Ives maintains a positive view, recognising significant potential despite the stock's lower trading levels compared to other tech favorites.

While some analysts predict a bumpy road ahead for Palantir , others hold on to a more constructive outlook. As the company approaches its Q2 earnings release, investors will be closely monitoring for any signs that might validate or contradict these divergent views.