UPDATE—May 7, 2024: This article has been updated to reflect share price information from early trading Tuesday.
Key Takeaways
- Palantir shares plunged in early trading Tuesday after the data analytics company’s weaker-than-expected full-year sales outlook overshadowed quarterly sales that topped expectations.
- The company’s annual revenue guidance of $2.68 billion to $2.69 billion fell short of the amount expected by analysts.
- Monitor if the Palantir share price can hold above the $23 level, an area on the chart where the price finds support from both a horizontal trendline and the 50-day moving average.
Shares in Palantir (PLTR) plunged in early trading Tuesday after the data analytics software company’s weaker-than-expected full-year sales outlook outweighed quarterly revenue that came in ahead of Wall Street expectations.
For the full year, the company which builds big-data and artificial intelligence (AI) solutions for governments and corporations, raised its 2024 revenue guidance to between $2.677 billion and $2.689 billion from its prior forecast of $2.65 billion to $2.67 billion, but the midpoint figure of that band still fell short of the $2.71 billion expected by analysts.
U.S. Commercial Business Drives Quarterly Sales
In the March quarter, the company posted adjusted earnings of 8 cents per share, matching the consensus view, while sales of $634 million grew 21% from a year earlier and topped forecasts of $625 million.
The company singled out its U.S. commercial business, which grew 40% year-over-year (YOY), for driving quarterly top-line growth. “We anticipate that our U.S. commercial business, which accounted for 24% of our revenue last quarter, will remain one of the most significant drivers of our growth in the near term,” Palantir CEO Alex Karp wrote in a shareholders’ letter released late Monday.
Elsewhere, the company’s government segment posted revenue of $335 million in the quarter, marking a 16% increase from a year earlier and 3% growth on a sequential basis. The analytics software giant said it closed a $178 million contract with the U.S. Army earlier in the year to help build a next-generation, field-deployable sensor station. “Warfare in this century will continue to be transformed by software,” Karp said.
Monitor This Price Level Amid Earnings-Driven Selling
Palantir shares, which have more than tripled over the past 12 months, broke above prior resistance in early February, retested the breakout level last month and rallied into the company’s quarterly results. However, the recent bullish momentum came to an abrupt end on Tuesday, with the stock opening sharply lower.
Looking ahead, investors should monitor if buyers can defend the $23 level, an area on the chart where the price finds support from both a horizontal trendline and the 50-day moving average. A breakdown below this important technical level could see a test of lower support around $20.30.
Palantir shares were down 14.5% at $21.55 at around 10:15 a.m. ET.
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As of the date this article was written, the author does not own any of the above securities.