Palantir’s (NYSE:PLTR) stock is down 14% today after the data analytics firm reported earnings that disappointed analysts and investors.
The Denver, Colorado-based company that has many contracts with the federal government, announced that it lost one cent per share for the April through June period. Wall Street had forecast earnings per share of three cents, according to Refinitiv data. The surprise loss has PLTR stock trending sharply lower today.
Prior to today’s move lower, PLTR stock had been down 38% this year and trading at $11.45 per share.
Palantir blamed the earnings miss on a decline in investments and marketable securities. In terms of revenue, Palantir reported $473 million for the quarter. This was slightly better than the $471.3 million expected by analysts who cover the company. Overall, revenue was up 26% from a year earlier, helped by a 46% increase in the company’s commercial revenue.
Palantir, which markets itself as a software company, said its number of private sector and commercial customers grew 250% from a year earlier, rising to 119 from 34 in the same period of 2021. Looking ahead, the company said it expects to report revenue between $474 million and $475 million for the current third quarter, and between $1.9 billion and $1.902 billion for all of this year.
Why It Matters
Shareholders and analysts have been looking for Palantir to report consistent profits, something the company has struggled to do since it went public in the fall of 2020 amidst the Covid-19 pandemic. At the same time, analysts have been calling for Palantir to grow its private sector clients and lessen its reliance on government contracts. Palantir has been criticized for its work with the Department of Defense and various security agencies, with some claiming the company collects data on U.S. citizens for the government.
Palantir’s latest earnings miss and weak forward guidance further hurt investor confidence in the company that was founded by technology investors Alex Karp and Peter Thiel in 2003. A string of disappointing earnings is the reason why Palantir stock has declined 50% in the past 12 months and is now 68% below its all-time high of $35.18 reached in January 2021. Until Palantir can demonstrate consistent earnings growth and profitability, the company’s stock will likely remain in the dog house with investors.
What’s Next for PLTR Stock
Palantir stock takes a beating today following its earnings miss and soft guidance. The sharp downturn in the share price today is further evidence that investors have no appetite for unprofitable, high-growth technology stocks.
Investors should approach PLTR stock cautiously given its continued decline.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.