Analysts call for big declines in Palantir despite solid earnings; Goldman sees more than 25% drop

CNBC

06-05-2025

Many analysts on Wall Street still not sold on Palantir even after the company posted first-quarter results and raised its full-year guidance. The firm reported in-line earnings and topped revenue estimates in the first quarter and upped its full-year outlook. CEO Alex Karp told investors on the company's earnings call that Palantir is in the "middle of a tectonic shift in the adoption" for its software, especially in its government segment. But while a few analysts raised their price targets on the stock following the results, many maintained hold or sell-equivalent ratings as concerns remain that Palantir may be overvalued. Among these are Goldman Sachs and Morgan Stanley. Goldman sees more than 27% downside, while Morgan Stanley calls for a nearly 21% decline. Shares were down 8% in the premarket. That said they are up more than 63% year to date. PLTR YTD mountain Palantir stock in 2025. Some shops, such as Loop Capital and Wedbush, had a more constructive outlook on the stock following the report. They reiterated their buy-equivalent ratings and bumped higher their price targets. Here's a look at some of the takeaways from Wall Street analysts. Goldman Sachs: maintains neutral rating, raises price target to $90 from $80 Analyst Gabriela Borges's new price target still signals downside of 27%. "We continue to view Palantir as well positioned to continue to deliver best-in-class growth given the secular trend towards enterprise AI adoption; the continued push for efficiency and technology adoption in the US government; and adoption of Operation Warp Speed among new defense entrants, traditional defense companies, and the broader manufacturing industry." Cantor Fitzgerald: raises price target to $110 from $98 but keeps neutral rating Cantor's new target calls for roughly 11% downside from Monday's $123.77 close. "Palantir's strong results indicate continued strong investment from global organizations in leveraging AI to improve both business outcomes and operational efficiencies," analyst Thomas Blakey wrote on Tuesday. "The company is well positioned to benefit from these trends, in our view, supporting continued dynamic growth." Morgan Stanley: raises price target to $98 from $90, maintains equal weight rating Analyst Sanjit Singh's forecast implies nearly 21% downside for Palantir stock. The analyst said his fundamental view on Palantir remained unchanged following first-quarter results. "[We're] raising target to $98 but valuation [is] too expensive to underwrite a reasonable return at ~95x CY27 FCF keeping us EW as we await a better entry point," he said. Mizuho: underperform rating, increases price target to $94 from $80 Analyst Gregg Moskowitz's outlook implies more than 24% downside for Palantir. "We remain quite impressed by PLTR's recent execution, and given its strong positioning and execution, there's no denying that it is deserving of a premium valuation," Moskowitz said. "However, valuation cannot and should not be irrelevant, and we find it very difficult to justify PLTR's very high multiple - 60x CY2026E revenue - that in our view already discounts material acceleration and upside versus consensus expectations." Deutsche Bank: reiterates sell rating, raises price target to $80 from $50 Analyst Brad Zelnick's forecast equates to more than 35% downside. "Our FY26 estimates increase 6% on revenue and 13% on operating income but with the stock trading at 57x our CY26E revenue in [after hours] trading, our main concern continues to be valuation," Zelnick said. RBC: reiterates underperform rating and $40 price target Analyst Rishi Jaluria's price target signals nearly 70% downside from Monday's close. "Overall, Government results were better than expectations, but our concerns about the runway for growth and product differentiation remain. Commercial came in slightly below consensus. While 2025 numbers move higher on guidance ahead of consensus, we question conservatism and if estimate revisions are priced in from here. Jefferies: keeps underperform rating and $60 price target Analyst Brent Thill's price target points to a decline of more than 50%. "Fundamentals are clearly alive, but we think irrational valuation at 56x CY26 rev skews risk/reward negatively." Loop Capital: reiterates buy rating, raises price target to $130 from $125 The firm's new price target signals upside of 5% ahead. "In terms of the stock, you can gripe about valuation, and that's legitimate, but it's difficult to find fault with the fundamentals. Bottom line, the market for enterprise AI is enormous, is at a tipping point as small-scale pilot programs move into production and AI use cases grow exponentially across all industries, and we believe PLTR is uniquely positioned as one of the category leaders in the space," analyst Mark Schappel wrote. Wedbush: maintains outperform rating, raises price target to $140 from $120 Analyst Dan Ives' new target signals upside of 13%. "We view Palantir as a generational tech name that we see as a trillion market cap over the next three years with PLTR being a core name in the AI Revolution theme over the coming years."