Palantir Shares Dip Despite Strong Q3 Performance and Raised Outlook
Palantir Technologies reported strong Q3 results, surpassing analyst expectations with revenue of $1.18 billion, up 63% year-over-year, and EPS of $0.21. US commercial sales surged 121% to $397 million, while government revenue grew 52% to $486 million. The company raised its annual revenue outlook to $4.4 billion and forecasts Q4 sales of $1.33 billion. Despite the positive results, Palantir's shares fell 3% in after-hours trading, possibly due to valuation concerns as the stock has gained over 150% this year.
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Palantir Technologies, the data analytics firm, reported impressive third-quarter results that surpassed analyst expectations. However, despite the strong performance, the company's shares experienced a decline in after-hours trading.
Q3 Financial Highlights
| Metric | Actual | Estimate | Year-over-Year Change |
|---|---|---|---|
| Revenue | $1.18 billion | $1.09 billion | +63% |
| Earnings per Share | $0.21 | $0.17 | N/A |
| US Commercial Sales | $397 million | N/A | +121% |
| Government Revenue | $486 million | N/A | +52% |
Palantir's third-quarter revenue saw a substantial year-over-year increase of 63%, reaching $1.18 billion and exceeding analyst estimates of $1.09 billion. The company's profit also outperformed expectations, with earnings per share of $0.21 compared to the projected $0.17.
Segment Performance
The company's growth was particularly strong in its US commercial segment, which experienced a remarkable 121% increase, reaching $397 million. The government sector also showed robust growth, with revenue rising by 52% to $486 million.
Future Outlook
In light of the strong performance, Palantir has raised its annual revenue outlook to $4.4 billion. For the current quarter, the company forecasts sales of $1.33 billion, surpassing analyst projections of $1.19 billion.
Market Response
Despite the positive results, Palantir's shares fell by 3% in after-hours trading. This decline is attributed to valuation concerns, as the stock has gained over 150% this year and currently trades at a price-to-sales ratio of 85.
Additional Insights
- CEO Alex Karp noted that the company's European business remains stagnant.
- Analysts suggested that investors were seeking more guidance about the company's performance outlook for 2026.
- Palantir has consistently beaten revenue estimates for 21 consecutive quarters, highlighting its strong track record.
While Palantir's financial performance demonstrates significant growth and market outperformance, the after-hours stock price decline suggests that investors may be cautious about the company's high valuation. As the company continues to expand its commercial and government segments, particularly in the US, future quarters will be crucial in determining whether Palantir can maintain its growth trajectory and justify its current market valuation.
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