On Monday, William Blair maintained an Underperform rating on shares of Palantir Technologies Inc . (NASDAQ:PLTR), with concerns about the company's revenue projections.
The analyst pointed out that despite Palantir's software gaining traction and the announced partnership with Booz Allen Hamilton (NYSE:NYSE:BAH), which was seen as a positive development, it does not alter the fact that Palantir's revenue is on track to fall short of its 2025 target of $4.5 billion by over $700 million, a goal set in August 2022.
The analyst noted that Palantir's current valuation has surged to $102 billion more than its peer Snowflake (NYSE:NYSE:SNOW), both of which have similar fundamentals. This valuation increase is attributed to factors not directly related to the company’s fundamental performance.
The partnership with Booz Allen, a leading government technology provider, has been in place for several years, and Booz Allen also collaborates with Palantir's competitors in data analytics, such as Databricks and Snowflake.
Booz Allen is recognized for its expertise in government IT analytics and has developed the Advana data analytics platform using Databricks. The U.S. Department of Defense has described Advana as its largest big-data platform, with a $15 billion contract in the works for future implementations and upgrades.
Moreover, Booz Allen won a $1.7 billion data analytics modernization contract from the Centers for Disease Control and Prevention last year.
The longstanding partnership between Booz Allen and Palantir, according to the analyst, is unlikely to significantly impact Palantir's revenue trajectory. This assessment suggests that the recent positive news of the partnership may not be enough to alter the company's financial outlook significantly.
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