The company offers Palantir Gotham, a software platform for government operatives in the defense and intelligence sectors, which enables users to identify patterns hidden deep within datasets, ranging from signals to intelligence sources to reports from confidential informants, as well as facilitates the handoff between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform.
The company also provides Palantir Foundry, a platform that transforms the ways organizations operate by creating a central operating system for their data, and it allows individual users to integrate and analyze the data they need in one place.
The company reported very solid earnings and offered encouraging forward guidance. The analysts said this:
Palantir reported strong fiscal fourth quarter results, including revenue and EBIT that came in 6% / 115% ahead of our estimates. Fiscal first quarter guidance called for revenue growth of 45%, while fiscal year 2021 revenue guidance was for 30%+, likely implying some deceleration throughout the year. However, we were encouraged to see management guide to $4 billion of revenue in fiscal year 2025, implying a 30% 5-year compounded annual growth rate from 2020. With a growing backlog of $2.8 billion in deal value (+31% y/y), we believe there is increasing visibility into the achievability of that long-term target. Also, we believe recent efforts to modularize Foundry and add channel partners like IBM should improve product market fit for the commercial business in the coming quarters.
Goldman Sachs also upgraded this one to Buy from Neutral, and the $13 price target rose to $34. The consensus target is $19.83, and Wednesday’s closing print for Palantir Technologies stock was $27.08, which was down almost 3% for the day.
This is a top tech pick across Wall Street. Splunk Inc. (NASDAQ: SPLK) provides a software platform for collecting, storing, indexing, searching and analyzing machine-generated data, such as log files and configuration files, which are prevalent in every type of IT system, device and application.
Splunk technology is potentially applicable and disruptive in several market segments, including IT operations, security and compliance, and business intelligence. These market segments are collectively worth $28 billion today.
Wall Street analysts agree that the company offers the de facto standard for security information and event management. It also offers orchestration solutions for security operations, a fast emerging category of products. Goldman Sachs feels new cloud efforts are not being realized across Wall Street, and its report said this:
We believe Splunks’ cloud transition is largely underappreciated by investors. SPLK’s defensible product portfolio backed by a solid technological core spanning security, apps performance, cloud infrastructure monitoring, DevOps and Observability coupled with its large 20K installed base of enterprises are potentially powerful levers to enable a transition to the cloud (30% of revenues at ~80% y/y). SPLK is poised to hit an inflection point where the cloud could hit 50% of annual recurring revenue in the next 2 years.
Goldman Sachs reiterated its Buy rating and $240 price target on Splunk stock. That compares to the consensus target of $203.51 and the most recent close at $170.50 per share.
These are three top stocks for investors with plenty of risk tolerance to consider for aggressive growth portfolios. With earnings out of the way, and the market fully priced at current levels, it may make sense to scale buy positions and see if we don’t get a pullback as the month rolls on.
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