Palantir Technologies reported financial results for the second quarter after the market close on Monday. We break down the key details from the AI software company’s report on Benzinga TV's Premarket Playbook.
00:04Obviously, Palantir strength, which we've been covering since, what, the 20s, right?
00:09And we had a couple of troll chatters come in here saying, this is a short, this is a short, this is a short.
00:14You guys have to short this.
00:15Yeah, that was 150 points ago.
00:17Thankfully, we didn't listen to that, and we're still here trying to trade.
00:20The other thing that we should notice is that, boy, oh, boy, these trend lines that we have been drawing on things, they have been spectacular.
00:30In terms of giving us ideas of where this price should go, where support is, where resistance is, the whole nine yards.
00:36It has been phenomenal, and it continues to be phenomenal.
00:40The trend line that we had starting from the Liberation Day low and actually had this kind of drawn here through the June low,
00:47this is now an upside trend line, and these earnings here today busting right through that.
00:53We are actually gapping above that trend line.
00:55This now makes this a key level here.
00:57I would say that 168 to 170 is absolutely going to be a potential area of support here for Palantir.
01:04If we stay above that, there's no stopping the stock from being able to ride that trend line higher.
01:10For all of you that draw fibs on things, I'd be curious to know what type of upside targets do you have from your fib drawings here?
01:18Is there anything that we should pay attention to with all of this?
01:23We shall see here, Palantir.
01:26Now, let's actually dive into some of the numbers here.
01:29Palantir reported financial results for the second quarter after the market closed yesterday.
01:33Palantir reported second quarter earnings of $1 billion.
01:37So Palantir putting up its first billion-dollar quarter, billion-dollar quarter, beating analyst estimates of $939.71 million.
01:46The company's second quarter adjusted earnings of $0.16 per share beat the analyst estimates of $0.14 per share.
01:54Palantir has now met or exceeded analyst estimates on the top and bottom lines in eight consecutive quarters.
02:00I can actually show you how to find that in Benzinga Pro.
02:03Really, really easy to do.
02:05And this company is just absolutely killing it.
02:08They continue to hit on all cylinders here.
02:10Total revenue was up 48% year-over-year, and U.S. revenue grew 68% year-over-year.
02:17U.S. commercial revenue grew 93% year-over-year, and U.S. government revenue climbed by 53% year-over-year.
02:25So just all of those metrics, double-digit gains, almost triple-digit gains in some cases.
02:30Palantir's customer count grew 43% year-over-year and 10% on a quarter-over-quarter basis.
02:37Just no chill in this.
02:40The company said it closed 157 deals worth over $1 million in the quarter, 66 deals worth at least $5 million,
02:50and 42 deals worth at least $10 million.
02:53We're not talking about little numbers here.
02:55These are big-time, big-boy numbers.
02:59Palantir generated $539 million in cash from operations and $569 million in adjusted free cash flow in the quarter.
03:07Palantir ended the quarter with approximately $6 billion cash equivalents and short-term U.S. Treasury securities.
03:15Quote, this was a phenomenal quarter.
03:17We continue to see astonishing impact of AI leverage.
03:21Our rule of 40 score was 94%, once again, obliterating the metric.
03:27Now, this came from Alex Karp.
03:29He's no stranger to talking very positively about the company.
03:35He's often attacked short sellers.
03:37For those of you that are unaware, the rule of 40 is a financial metric that is used in the SaaS industry,
03:43stating that a company's combined revenue growth and profit margin should equal or exceed 40%.
03:50This rule helps assess whether a software-as-a-service company is balancing growth with profitability effectively.
03:57So their growth, their revenue growth rate and profit margin should equal 40%.
04:02Palantir's was 94%.
04:03Just an absolute monster, monster print here, and Palantir is reacting to that.
04:09Palantir expects third-quarter revenue to be in the range of $1.083 billion.
04:14They're anticipating and guiding for another billion-dollar quarter here, and that is above the estimate.
04:21Palantir also raised full-year guidance.
04:23Palantir now expects full-year 2025 revenue of $4.14 billion to $4.15 billion,
04:29up from the prior guide of $3.89 billion to $3.9 billion.
04:33Analysts were forecasting full-year revenue of $3.9 billion.
04:36Palantir raised its U.S. commercial revenue guidance, adjusted income from its operations guidance,
04:41and adjusted free cash flow for guidance for 2025.
04:45The company said it continues to expect positive GAAP operating income and net income in each quarter this year.
04:52No chill.
04:52It does not plan on calming down at all.
04:56And I think, you know, for us trying to figure out how we're going to trade this company with, what, 270 forward P.E.,
05:04that doesn't really matter right now.
05:06I agree with all the folks that say eventually it is, but right now it doesn't.
05:11And this means that this is going to make this harder to trade for the upside.
05:14It's definitely something that I think you want to wait and buy on a pullback once it confirms a support area.
05:20And until this thing stops performing, I think there's a lot of potential upside.
05:27Palantir's management team discussed all of this on the conference call,
05:31and we'll see how the market actually responds to that here today.
05:35I do have another article here just to get some more information on Palantir.
05:39I'll try and not repeat myself, but forgive me if there's a little bit of that.
05:43It extended its gain, reaching 168.
05:46That's actually the number that we just talked about on the trend line, interestingly enough.
05:51However, technical analysis, Mark Newton, technical analyst, excuse me,
05:54Mark Newton warned of a stretched valuation as the stock's relative strength indicator hits 95.
06:02Nothing new here.
06:03We've been talking about that stretched valuation for a while, and it hasn't mattered yet.
06:08Just saying.
06:09Newton, managing director of Fundstrat Global Advisors,
06:12posted on X that the company closed 42 deals worth $10 million last quarter,
06:15but questions remain about whether that pace is sustainable,
06:20given its valuation of 70 to 80 times revenue.
06:25All right, so if you're interested in this at all, or the thread, or the chart,
06:29because it's small and you want to see it on your own screen,
06:32there is the link to this.
06:34You can go ahead and go through that.
06:36Palantir reported revenue of $1.004 billion.
06:39That crushed analyst estimates, as we discussed.
06:43The astonishing impact, phenomenal quarter,
06:45lots of really kind of verbose things being mentioned.
06:49That car's got an aftermarket exhaust.
06:51CNBC's Jim Cramer remained bullish.
06:54Uh-oh, is that the death knell?
06:55We'll have to see.
06:56Jim Cramer remained bullish despite the elevated metrics.
06:59Quote, Palantir, when it was 50, I said it would go to 100.
07:02And when it was 100, I said it would go to 150.
07:05Now that it's topped 150, its next stop is 200.
07:08So there you go.
07:09Cramer's saying that this is going to 200.
07:12Place your bets, folks.
07:15Wedbush analyst Dan Ives calling Palantir the messy of AI.
07:19We've heard that a few times here.
07:20A projected trillion-dollar market cap within two or three years.
07:24They keep doing billion-dollar quarters.
07:25I think that's definitely going to happen.
07:28Palantir raised its full-year revenue guidance to $4.14 to $4.15 billion.
07:33That's well above the analyst estimates.
07:34Newton cautioned that, quote, late August could bring some necessary mean reversion and recommended running trailing stops on extended issues like this is a must when the air gets a bit thin.
07:49So, okay, this is actually really smart, right?
07:52If you're long in this, you probably want to take some gains.
07:55If you have a long-term position in this, like an investment, perhaps you want to trim that in accordance with your allocation parameters or your risk parameters.
08:05The stock has moved so much, so much that it is, at this point, it really behooves you to take gains.
08:11So, the trailing stop method here, something we've discussed on our program, that might be a pretty good idea.
08:17But he's also talking about August maybe bringing some necessary mean reversions.
08:22And this is kind of what I was just mentioning.
08:23We should see if there's a way that we can actually buy this on some type of support.
08:28If this pulls back into a support level and holds that, does that set up for a long?
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