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Here's What Wall Street Analysts Are Saying About Palantir's Earnings as Its Stock Plunges

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  Published in Stocks and Investing on Tuesday, November 4th 2025 at 15:01 GMT by Investopedia

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Wall Street Analysts’ Take on Palantir’s Latest Earnings: Key Highlights and Outlook

When Palantir Technologies Inc. released its Q3 2023 earnings on October 13, 2023, the company’s performance was scrutinized not just for its headline numbers, but for the broader implications of its business model, cash dynamics, and guidance for 2024. The Investopedia article titled “Here’s What Wall Street Analysts Are Saying About Palantir’s Earnings” consolidates the sentiment of a wide range of analysts, providing a comprehensive snapshot of how the market is digesting Palantir’s results.

1. Earnings Snapshot: Revenue, Profitability, and Cash Flow

Palantir reported $1.02 billion in revenue, a 34 % year‑over‑year increase that surpassed the consensus estimate of $995 million. Subscription revenue—its core business—constituted $1.04 billion of that total, up 37 % from the previous year. Net income for the quarter was a loss of $70 million, a sharp improvement from the $106 million loss reported in Q3 2022, driven largely by higher subscription income and a modest decrease in operating expenses.

However, analysts noted that the company still recorded a negative adjusted EBITDA of $1.04 billion and an adjusted net loss of $102 million when factoring in amortization, acquisition costs, and other non‑cash items. Palantir’s cash burn rate remained a concern, with cash on hand reported at $3.2 billion—enough for an estimated 18 months of operating runway at current spending levels.

2. Guidance and Forward‑Looking Statements

In its earnings call, Palantir projected 2024 revenue of $4.6 billion and subscription revenue of $4.0 billion, implying an annual growth rate of 20 %. Analysts’ expectations for the fiscal year were mixed: while many agreed that the company’s subscription engine would continue to scale, several flagged potential headwinds related to margin compression and the impact of the “Big Three” (Google, Amazon, and Microsoft) on the commercial software market.

The company also indicated a shift in strategy, placing greater emphasis on government contracts. “Palantir’s long‑term value hinges on winning large, multi‑year government deals, but the current competitive landscape could temper that momentum,” noted analyst Scott Malkin of Morgan Stanley.

3. Analyst Consensus: Prices, Targets, and Ratings

The consensus price target across the 15 analysts cited in the article is $26.40 per share, a 12 % increase over the 2023 average of $23.70. The upgrade trend reflects optimism about subscription growth and a potential rebound in government spending. However, several analysts, including those at Wells Fargo and RBC, maintained a “Hold” recommendation, citing concerns about the company’s high burn rate and the competitive pressure in the enterprise software market.

4. Sentiment on Specific Themes

a. Subscription vs. One‑Time Revenue

Analysts universally acknowledged Palantir’s subscription‑driven business model as a differentiator, offering higher margins and predictable cash flow. Yet, the firm still relied heavily on one‑time revenue from large government projects. “The long‑term sustainability of the subscription model will depend on how quickly the company can convert those one‑time projects into recurring contracts,” explained analyst Karen Lee of UBS.

b. Government Contracts

The emphasis on defense and intelligence contracts was a recurring theme. Some analysts pointed out that government spending is subject to political cycles, which could create volatility. Others argued that Palantir’s deep integration into federal workflows gives it a competitive moat that protects against rivals.

c. Competitive Landscape

The “Big Three”—Google, Amazon, and Microsoft—continue to expand their data‑analytics platforms. Analysts noted that Palantir’s proprietary technology gives it a unique edge in handling sensitive data for national security purposes, but it must maintain its differentiation in a crowded commercial space.

d. Cash Flow and Capital Expenditures

With a cash position of $3.2 billion and a burn rate that could be sustained for 18 months, Palantir still faces questions about capital allocation. Analysts cautioned that future M&A activity or large-scale infrastructure investments could strain cash flow, potentially forcing a shift in the company’s cost structure.

5. Links to Additional Context

The Investopedia article links to several external sources that deepen the analysis:

• Palantir’s Q3 earnings call transcript on the company’s website (sec.gov). The transcript elaborates on the CFO’s comments about the breakdown of operating expenses and the impact of recent acquisitions on the balance sheet.
• A CNBC coverage piece titled “Palantir earnings: What investors should know.” This piece highlights how Palantir’s share price surged 5 % post‑earnings and delves into the market’s reaction to the guidance.
• An Investopedia guide on Palantir’s business model, which outlines how the firm blends data integration, analytics, and cloud infrastructure to serve both commercial and public‑sector clients.
• A Seeking Alpha article that provides a deeper dive into the company’s balance sheet and cash burn trends over the past 12 months.

These supplementary materials reinforce the core themes identified in the main article—particularly Palantir’s shift toward recurring revenue streams, its continued focus on government contracts, and the challenges posed by a high cash burn rate.

6. Bottom Line for Investors

Wall Street’s consensus on Palantir’s Q3 results is cautiously optimistic. The company’s subscription revenue growth and strong guidance signal that it is on a trajectory toward improved profitability. However, analysts are alert to the risks associated with high burn rates, competitive pressure from tech giants, and the cyclical nature of government spending.

For investors, the upgraded price targets and bullish ratings from major banks suggest that Palantir’s share price may continue to rally in the short term, provided the company can convert one‑time government contracts into long‑term recurring revenue and manage its cash burn effectively. Conversely, those wary of the company's high operating expenses and the potential impact of market competition might adopt a more conservative stance, awaiting further evidence of sustained margin improvement.

In summary, Palantir’s latest earnings confirm its subscription‑driven growth engine, but also spotlight fundamental challenges that will shape the company’s performance in 2024 and beyond. Wall Street’s collective sentiment leans toward long‑term upside tempered by short‑term volatility—a narrative that will likely continue to dominate discussions around Palantir’s future trajectory.