Palantir Technologies Inc (NASDAQ: PLTR) is slated to report its earnings for the fourth quarter on February 3rd after the bell.
The AI-enabled data analytics company is expected to see its revenue pop another 27% on a year-over-year basis while the adjusted earnings are projected to hit 11 cents a share – up 37%.
Ahead of the company’s earnings release, famed investor Jim Cramer says its numbers could prove strong enough for investors to push this stock up further to the much-anticipated $100 level.
Note that Palantir stock does not currently pay a dividend, though.
Wedbush shares Cramer’s optimism on Palantir stock
Cramer has immense confidence in the leadership of Palantir’s chief executive Alex Karp that he called a “messianic figure” last week on Mad Money.
He caters to his retail investor base and the stock’s a levitator.
The former hedge fund manager even went on to call Palantir Technologies a “GameStop with the brain”.
His bullish view on PLTR shares is similar to Dan Ives, a senior analyst at Wedbush Securities.
Ives recently raised his price target on Palantir stock to $90, adding the data analytics company “has a path to become the next Oracle or Salesforce over the coming years.”
The Wedbush analyst is convinced that Wall Street is underestimating the revenue PLTR could generate from its Artificial Intelligence Platform (AIP).
Jefferies analysts see a crash in PLTR to $28
Investors should know, however, that Wedbush and Cramer has a contrarian view on Palantir stock.
The rest of the Wall Street is actually concerned that PLTR shares are priced to perfection following a 12x gain over the past two years.
In fact, “any signs of decelerating growth could cause concern” – one that could result in a crash in Palantir Technologies to $28, as per Jefferies analysts.
Their price target warns of a potential downside of an alarming 65% in the AI stock.
Even the average price target on Palantir shares sits at $50 at writing, or about 40% below the current price.
Plus, the Nasdaq-listed firm doesn’t pay a dividend to appear more attractive to income investors either.
Why are Street analysts dovish on Palantir shares?
For the most part, it’s the rather inflated price-to-earnings multiple on Palantir shares that doesn’t sit well with investors.
But one must also question if this conventional valuation metric fully captures the growth potential and future earnings prospects, especially of names like PLTR that are heavily investing in innovative technologies, including artificial intelligence in the first place.
After all, investors would have missed out on every significant rally within the tech space if they had focused solely on the PE ratio.
That said, it’s reasonable to believe that Palantir stock will find it increasingly more difficult to replicate its past performance.
It may have been in a “god” mode since late 2022 – but a further push to $100 this month will require not just strong earnings, but just as encouraging guidance for adjusted income from operations as well.
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