There’s Excellent news on the horizon for Palantir (PLTR) buyers. In response to William Blair’s Kamil Mielczarek, the funding agency’s Dotted Line tracker exhibits the large knowledge specialist has been awarded a $90 million/four-year contract to offer the Division of Veterans Affairs (the VA) with its Foundry software program. The analyst thinks an announcement must be made this week.
Nevertheless, buyers shouldn’t get too excited as that’s about the place the excellent news ends. Whereas Mielczarek naturally calls this new contract a “optimistic,” so far as the analyst is conscious, it was Palantir’s “solely important new authorities contract within the September quarter.”
“We don’t imagine Palantir’s latest bookings are ample to stop Palantir’s authorities income development fee from quickly decelerating over the following yr,” the analyst went on to forlornly say.
Mielczarek estimates that in Q3 (September quarter), on a duration-adjusted foundation, Palantir gained authorities contracts value $61 million, method beneath the $107 million it comprised of this channel in the identical interval final yr.
Usually, in comparison with its Division of Protection contracts, the corporate’s civil authorities contracts have been “comparatively small.” Nevertheless, new U.S. DoD contracts wins have been scant, the “dry spell” leading to only one new work contract over the previous yr; on the DoD contracts web page, the House Drive contract comes up as the one one awarded through the interval.
The bearish case for Palantir has all the time revolved round its dependance on big authorities contracts, as in contrast to lots of its knowledge analytics friends, its industrial division hasn’t been capable of generate the identical form of “hypergrowth.” Mielczarek says the brand new gross sales technique is “exhibiting potential,” however it’s too early to wager on its success. And with a fourth consecutive quarter of Authorities backlog “roughly flat” at $1.3 billion, the indicators are considerably ominous.
“We see danger that like a number of friends, Palantir may very well be negatively impacted by federal contracts slipping ahead,” the analyst summed up.
To this finish, Mielczarek maintains an Underperform (i.e., Promote) ranking for PLTR inventory with no fastened worth goal in thoughts for the shares. (To observe Mielczarek’s observe file, click on right here)
In response to the remainder of the Road, shares are at the moment buying and selling at their honest worth, with the $24 common goal suggesting the inventory will keep range-bound for the foreseeable future. Ranking clever, the bears are in management; the inventory’s Average Promote consensus ranking relies on 3 Sells, 2 Holds and 1 solitary Purchase. (See Palantir inventory evaluation on TipRanks)
To seek out good concepts for shares buying and selling at enticing valuations, go to TipRanks’ Greatest Shares to Purchase, a newly launched device that unites all of TipRanks’ fairness insights.
Disclaimer: The opinions expressed on this article are solely these of the featured analyst. The content material is meant for use for informational functions solely. It is rather essential to do your individual evaluation earlier than making any funding.