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RBC Capital analyst Rishi Jaluria downgraded to Underperform from Sector Perform with a price target of $19, down from $25, implying a 17% downside.
The analyst cites the company's "mixed" Q3 results with deceleration in the government business while noting that its commercial acceleration that is being fueled by SPAC investments is "unsustainable."
Jaluria adds that his confidence in Palantr's 30% growth is reduced, and he sees the stock's valuation as "full."
William Blair analyst Kamil Mielczarek says Palantir revenues decelerated in the quarter to 36% year-over-year, down from 49% in the first half of 2021.
While Palantir delivered "strong" headline numbers, the growth in the second half of 2021 is "heavily reliant on strategic investments."
The analyst remains concerned about the business's ability to maintain 30% organic growth over the near term and keeps an Underperform rating on Palantir.
Citi analyst Tyler Radke states Palantir's decelerating growth "came into center view" in Q3 with weakness in both commercial and government.
While guidance for Q4 was issued slightly ahead of the Street, it still implies slower growth, even on an easier comparison and with significant tailwinds from SPAC-related customer contracting.
He reiterates a Sell rating on the shares with an $18 price target.
Wolfe Research analyst Alex Zukin lowered the price target to $20 from $25, and maintained a Peer Perform following what he calls an "interesting" Q3 report.
He notes that shares were down after the announcement, which he blames a "meaningful top-line deceleration," pointing out that total revenues, ex. SPAC-contributions of $373 million grew 29% year-over-year, which Zukin said is up only less than $1 million sequentially from Q2.
His lower price target is due to the core growth deceleration as he is "not yet comfortable assigning a similar confidence interval and multiple to SPAC-based commercial revenue."
Morgan Stanley analyst Keith Weiss raised the price target to $24 from $22, implying a 4% upside.
He reiterated an Underweight after delivering another beat versus consensus expectations "across all key headline metrics" in Q3.
Weiss sees "signs of slowing underneath the hood" as a slowdown in core revenue and commercial growth, coupled with a sharper slowdown in the government segment, which opens up the debate on the durability of Palantir's growth.
Price Action: PLTR shares traded lower by 5.6% at $22.9 on the last check Wednesday.
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