Key Takeaways:
Palantir Technologies shares opened Friday at $172.01, up 10 percent, after Bank of America set a $255 price target following the company's record second-quarter results reported Aug 3.
"Numbers aren't everything, but with our growth, no one this size has grown by even 50 percent," Chief Executive Alex Karp said on CNBC.
Revenue of $1.935 billion beat the $1.81 billion consensus by 6.8 percent, up 93 percent year over year and 19 percent sequentially. Adjusted EPS of $0.41 topped the $0.34 estimate. US commercial revenue rose 149 percent to $764 million, while US government revenue climbed 90 percent to $809 million.
The 10 percent gain Friday extends a 30 percent surge on Aug 4 that erased billions in short-seller losses. BofA's $255 target implies roughly 48 percent upside from Friday's open, among the highest on Wall Street, where the consensus 12-month target sits at $182.20.
GAAP net income crossed $1 billion for the first time at $1.062 billion, a 55 percent margin. Adjusted operating income reached $1.194 billion, a 62 percent margin, and adjusted free cash flow totaled $1.22 billion, a 63 percent margin. The company posted a Rule of 40 score of 155, combining 93 percent revenue growth with a 62 percent adjusted operating margin.
Management raised full-year revenue guidance by $490 million to $8.15 billion, with US commercial guidance lifted to $3.424 billion. Third-quarter revenue is projected at $2.160 billion to $2.164 billion.
Deal activity supported the outlook. Palantir closed 220 contracts of at least $1 million, including 98 above $5 million and 73 above $10 million. US commercial total contract value reached $2.13 billion, and remaining deal value climbed to $6.24 billion, more than double a year earlier. Net dollar retention hit an all-time high of 157 percent.
Citi raised its price target to $245 and Mizuho to $215 following the report. The stock trades at roughly 50 times forward sales and 107 times trailing earnings, among the highest multiples in software. The 52-week range spans $106.37 to $207.52.
The guidance raise points to management's expectation that AI demand will accelerate through year-end. Investors will watch third-quarter results, due in early November, for evidence that US commercial growth can hold above 100 percent on a larger base.
This article is for informational purposes only and does not constitute investment advice.
