Palantir Technologies Inc.'s (PLTR) elevated valuation will be under scrutiny as the data analytics giant reports earnings after market closure on Monday. The stock's current trading levels, hovering between 170-500% above its peer group's earnings, raise concerns about its sustainability.
Amidst heightened competition and an uncertain European outlook, Palantir's ability to maintain significant growth is a key focus. Jefferies analysts estimate that the company would require a 50% annual growth rate over the next four years to justify its current valuation.
Analysts expect Palantir to report a 28% revenue increase, driven by momentum from government contracts and its AI platform. However, increased competition and a potential slowdown in its international business could weigh on its growth prospects.
Insider sales have also raised concerns, with Palantir recording the highest insider sales of any S&P 500 company over the past three months. Notable sellers include early investor Peter Thiel and CEO Alex Karp.
Despite the concerns, some analysts remain optimistic about Palantir's potential for continued growth. Portfolio manager Joe Tigay believes the company's past performance justifies its premium valuation.
The market expects Palantir to report GAAP earnings per share of 3 cents and revenue of $776 million. The implied one-day move for shares following earnings is estimated at more than 13% in either direction.
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