Palantir shares are down 13%, according to a Wall Street analyst

Palantir Technologies (NYSE:PLTR) shares have posted strong gains in 2024 trading. Spurred by improved margins, adoption of the company’s artificial intelligence (AI) services and expectations of long-term tailwinds associated with the unfolding technology revolution, the data software specialist’s share price is up 34% so far this year increased. Even more striking, the shares are up 186% in the last twelve months.

But one analyst group on Wall Street is pumping up prices on the stock. In a note published on Palantir on Thursday, brokerage firm Monness, Crespi, Hardt & Co. a $20 per share price target for the stock, but downgraded its rating to Sell from Neutral.

Palantir’s stock price retreated in Thursday trading in response to the updated reporting, falling 6.1% during the daily session. With the data software specialist’s shares trading at around $23 per share, Monness’ price target would imply a 13% downside.

What’s next for Palantir stock?

Monness thinks Palantir remains well-positioned to benefit in the long term trends in artificial intelligence, but the company believes that the software company’s valuation has become unreasonably high. In particular, the company’s analysts noted that Palantir’s sales to government customers were lumpy.

The analyst suggests that Palantir’s execution is too irregular to warrant an ‘excessive’ valuation. Notably, Monness also said it expects the darkest days of an economic downturn are still ahead of us.

With Palantir’s stock trading at around 70 times this year’s expected earnings and 19 times expected revenue, there’s no doubt the company has a highly growth-dependent valuation. The company has seen sales…

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