Palantir Turns Profitable; Firm Crosses an Important Milestone to Finish 2022; Shares Fairly Valued

We are raising our fair value estimate for Palantir to $9 from $8 as we account for the time value of money following our model roll. The firm fourth-quarter financial results came largely in line with our prior estimates and the firm’s guidance for fiscal 2023 was marginally below our prior forecasts. We continue to have a positive outlook on Palantir’s ability to expand sales from both governmental and commercial clients. We also believe that Palantir’s platforms stand to benefit as firms increasingly leverage big data to deliver business outcomes. With shares up around 15% after hours, we believe the market has calibrated its valuation to reflect the firm’s strong fundamentals and we view the firm’s shares as fairly valued.