Data analytics company Palantir Technologies (NYSE:PLTR) reported its second-quarter earnings last week. Sales totaled $533.3 million for the period ending June 30 and grew 13% year over year. The company's operating income also improved by 2% to $10.1 million.
Next quarter, the company projects revenue to be between $553 million and $557 million, suggesting a quarter-over-quarter increase of 4% in the top line. For the full year, the company projects that its total revenue will be at least $2.2 billion – that would be 16% higher than the $1.9 billion it reported in 2022.
Analysts were encouraged by the company's most recent results with many of them boosting their price targets for the stock. But the consensus analyst price target is around $13, which is less than where the stock trades at today.
Palantir has been one of the hottest stocks to own this year as it is up around 140% thus far. The company has the potential to be one of the big winners thanks to the emergence and growing popularity of artificial intelligence (AI). Earlier this year, Palantir launched an AI platform, with management reporting record demand for the new tool. The platform is still in its early stages but given the excitement around AI, it has the potential to be a big revenue driver for the business in the future.
For long-term investors, Palantir can be a good buy as its margins and bottom line are improving. As its profitability improves, it will become a less riskier business to invest in. And with a price-to-earnings growth ratio (PEG) of just over 1, the stock isn't expensive when factoring in its estimated future growth. If you're planning on buying and holding for years, this can be a solid investment to buy today.
