Boosting Palantir Price Target as Wall Street Anticipates Big Earnings
We have now set the highest Palantir price target on Wall Street by a wide margin.
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Ladies and gentlemen... it just happened. Our favorite stock, Palantir Technologies PLTR, which has become the single greatest investment of my four-decade career, has once again, hit my target price. Huzzah!! The crowd roars.
CEO Alex Karp, at this time, is my choice for top CEO at an up-and-coming tech name and may be my choice for top CEO at any firm of any kind. Of course, it seems unreal to refer to a stock trading at $122 a share and at a market cap of $274 billion as an "up and comer."
New readers have to understand, the "Stocks Under $10" portfolio, which continues on in spirit in my columns, was in this name since it bore a $6 handle. Between that portfolio and when that product ended (when I was able to buy the shares for myself with a $16 handle), we have been long this name continuously to this day.
In fact, and this must be two or three years ago, I was asked by Liz Claman in a studio interview broadcast at Fox Business, what was the one stock that I would tell investors to buy. I told Claman that I could not tell others what to buy, but I will tell others that I am buying PLTR for myself, for my kids and for future generations of Guilfoyles. I have since shaved my long equity position at target prices when met and reloaded even more shares than I had sold on selloffs.
That's called target price discipline. It's how one builds a position in a stock that seems only to rise. I sold shares with a $113 handle in February and bought back two and a half times the number of shares sold from $102 down to $68. The stock bottomed at $66.12 on April 7. Here, we are running higher into earnings which is something I never really like. Target price discipline, gang. It's difficult to enforce upon oneself, but it's a key component of risk management.
Earnings Due Monday Afternoon
We'll hear from Palantir on Monday afternoon. Wall Street expects the firm to put a GAAP EPS of $0.07 to the tape for its first quarter, adjusted up to $0.13 on revenue of more than $862 million. This would be just above the projected sales of $860 million at the midpoint that the firm had guided investors toward. Performance like this would be up from the year-ago comparison of $0.08 (adjusted) on year-over-year revenue growth of nearly 36%.
This would also continue the acceleration of the firm's year-over-year growth in sales, sequential from 19.6% to 20.8% to 27.2% and to 30% over the prior four quarters. On top of that, of the 12 sell-side analysts that I know that cover the stock, all 12 have increased their estimates for Palantir since the start of the quarter.
Latest News
On Thursday, Bloomberg News reported that a new mobile intelligence gathering vehicle and trailer produced for the U.S. Army had been ranked as one of the Army's top-performing programs. Army spokesperson Brandon Pollachek was quoted as having written:
"TITAN demonstrates how the Army is leveraging modern acquisition and contracting approaches through use of Middle Tier of Acquisition (MTA), Other Transaction Agreements (OTAs) and soldier-centered design, and is a great example of a non-traditional software company competing for and successfully becoming the prime vendor for a software centric, hardware-intensive program."
Pollachek added, "There have been three prototypes delivered so far, with seven expected by Q4CY25, and ten expected by Q1CY26. Currently, the Army is assessing the number of TITANs as we exercise prototypes and evaluate where they will be needed in the future structure of the Army."
In March, the U.S. Army confirmed that a Palantir subsidiary had been awarded a two-year contract to begin Phase 3 of its next generation targeting program. TITAN is the U.S. Army’s next-generation deep-sensing capability platform. It uses Palantir's AI and machine learning capabilities to allow shooters in the field necessary support beyond simple line-of-sight targeting.
That $178.4 million award is for the development of 10 TITAN prototypes, including five advanced and five basic versions, as well as the integration of new critical technologies and then the transition to the field. Palantir beat out RTX RTX, which is the old Raytheon, for the contract. RTX had worked alongside Palantir on Phase 2.
What Now?
This is the chart that I showed readers less than two weeks ago. I explained that what had been a falling-wedge pattern of bullish reversal had morphed into a double-bottom pattern of bullish reversal with a $98 pivot. That day, I increased our target price from $116 to $122. On Friday morning PLTR took out that target. Huzzah. Target Discipline mode activated.
Why do we act when our target prices are taken out? Because we'll feel pretty foolish if a stock trades at our target, especially ahead of a known new event, and then sells off and we did not sell any. Nothing makes me angrier than feeling foolish, even if nobody else knows. I am my own drill instructor.
So, I will make a small sale with the expectation that I will be able to at some point add what I sold plus maybe a little more at a lower price. This strategy has worked beautifully in this stock for years now. That said, I will be adjusting my target price higher for Palantir Technologies for the lion's share of my position, yes ahead of earnings.
Palantir Technologies (PLTR)
Target Price; $153 (up from $122)
Pivot: $125 (February top)
Add: Down to 50-day SMA (currently $91.50)
Panic: Loss of 200-day SMA (currently $64.40)
Note: My new $153 target price is now the highest target price for this name on Wall Street by a wide margin. This target is a 22.4% premium to the $125 targets shares by Mark Schappel of Loop Capital, Mariana Perez Mora of Bank of America and TheStreet Pro's own Chris Versace.
Why Take Something Off?
Simple: Because if the stock stops going higher here, then our beautiful double-bottom breakout would morph into a much scarier looking double-top pattern of bearish reversal. I have overlaid what that might look like over my existing chart for your entertainment pleasure, and so readers understand why we make the decisions we make.
Now, let's go make some dough. Rock on.
At the time of publication, Guilfoyle was long PLTR and RTX equity.
