UPDATE: Deutsche Bank Starts Palantir Technologies Inc. (PLTR) at Hold

November 1, 2021 4:41 PM EDT
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Price: $7.28 -1.22%

Rating Summary:
    4 Buy, 5 Hold, 4 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 0 | Down: 5 | New: 0
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(Updated - November 1, 2021 4:48 PM EDT)

Deutsche Bank analyst Brad Zelnick initiates coverage on Palantir Technologies Inc. (NYSE: PLTR) with a Hold rating and a price target of $25.00.

The analyst comments "While we appreciate Palantir’s strong technology platforms, mission-critical applications, and the robust market demand for AI / Analytics, we are concerned on several fronts including the sustainability of pricing, ability to penetrate down-market, and ultimately the long-term economics of the business. Palantir is perhaps best defined by its use cases: whether that be hunting terrorists, saving soldiers’ lives by predicting the locations of roadside explosives, or any of the many ultra-high-stakes applications in both public and private sectors – all mission-critical. Palantir deviates from patterns most familiar to software investors given its outsized public sector exposure, high customer concentration, cancellable contracts, tightly coupled software and services, and ultimately a unique revenue model. This doesn’t make it a bad business, but the lack of transparency to mix and degree by which stock comp flatters profitability, both limit our confidence in the long-term economics of the business. We therefore think holistically about valuation, whereby PLTR trades at 30x EV/Revenue (2022E) vs. 18x for its peer group that includes a mix of high-growth software companies and government contractors, thus supporting our Hold rating and DCF-derived $25 target price."

For an analyst ratings summary and ratings history on Palantir Technologies Inc. click here. For more ratings news on Palantir Technologies Inc. click here.

Shares of Palantir Technologies Inc. closed at $25.88 yesterday.

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