Shares of Palantir Technologies (NYSE:PLTR) were hit with a 3.4% decline in early Friday trading, following a downgrade by Jefferies analysts to an Underperform rating. The revised price target of $13 indicates a potential downside risk of 20% based on the previous day’s closing price.
While Jefferies analysts admit that Palantir has a unique position in the market with a strong technological advantage, they believe the recent surge in the stock’s value is unsustainable. The analysts attribute the rally to “AI euphoria” and retail trading momentum, highlighting the lack of a clear monetization strategy.
Despite these concerns, analysts still acknowledge Palantir’s potential in the long-term due to its AI technology advantage. However, given the current valuation levels, they believe there is more risk than reward for investors.
In their note, the analysts pointed out that Palantir’s revenue multiple is significantly higher than the two-year average, further indicating that the stock may be overvalued.
Palantir is known for its data analytics platform that caters to complex and critical use cases that other vendors cannot address. While analysts recognize the company’s potential to gain market share in a large and underpenetrated total addressable market (TAM), they caution against the current valuation levels.
The downgrade by Jefferies underscores the concerns over Palantir’s valuation, providing investors with a cautionary view amidst the recent market enthusiasm. As the company continues to evolve its business strategy and address monetization challenges, investors will be closely watching for any updates that may impact the stock’s performance.
The source of the article is from the blog enp.gr