Palantir stock surges on annual guidance hike; analysts raise valuation concerns

Investing.com -- Palantir Technologies raised its annual guidance Monday after reporting second-quarter results that beat Wall Street estimates as the big data analytics company benefited from new business wins in a sign of ongoing momentum in artificial intelligence. 

For 2024, the company is now guiding revenue in range of $2.742 billion to $2.750B, up from a range of $2.68B and $2.69B previously.  

Palantir Technologies Inc (NYSE:PLTR) surged more than 11% in premarket trading Tuesday. 

Palantir reported Q2 adjusted earnings of $0.09 a share on revenue of $678.1 million. That compared with analysts estimates for adjusted EPS of $0.08 on revenue of $653.2M.

The better-than-expected results followed a slew of new business wins as the company closed 27 deals over $10M, taking customer count growth to 41% year over year in Q2. 

Looking ahead, the company forecast Q3 revenue of $697M to $701M, compared with Wall Street estimates for $680.7M.

While praising the company's quarterly performance, analysts at Jefferies believe that investors "remain concerned on the multiple" with PLTR stock trading at 19x Jefferies's 2025 revenue. This "would make it the richest asset in our coverage universe," analysts highlighted, maintaining a Hold rating on the stock.

Mizuho analysts voiced similar comments.

"While the 2Q results are encouraging, we continue to believe PLTR needs to consistently demonstrate stronger execution and growth in order to justify a notably higher valuation," analysts said. "Given the inherent lumpiness of this business, we believe that will likely be challenging."

Yasin Ebrahim contributed to this report.