Palantir Technologies plunges after Q1 earnings

• Palantir Technologies reported earnings

• Revenue in-line with expectations, profit misses

• Positive cash generation

• Weaker than expected sales guidance for Q2 2022

• Full-year forecasts maintained

• Stock trades over 20% lower today

Palantir Technologies (PLTR.US) reported Q1 2022 earnings report today ahead of the Wall Street session open. Stock is dropping over 20% in premarket as the report came short of market's expectations, especially in terms of guidance for the current quarter. Let's take a quick look at the release from Palantir.

Earnings worse than expected

Headline results from Palantir Technologies were mixed. While the company managed to deliver a 30+% revenue growth and sales that were slightly above market expectations, adjusted earnings per share missed estimates. Nevertheless, improvement in the company's business is clear. Adjusted EBITDA also saw an almost 30% increase in Q1 2022. Another positive factor is a positive cash generation, both on operating level and free cash flow level. 

• Revenue: $446 million, +31%  YoY (exp. $443 million)
  - Commercial revenue growth: 54% YoY
  - Government revenue growth: 16% YoY
• Adjusted earnings per share: $0.02 (exp. $0.04)
• Non-adjusted earnings per share: -$0.05
• Adjusted EBITDA: $121.7 million (+27% YoY)
• Net Loss: $1.1.4 million
• Cash from operations: $35 million
• Adjusted free cash flow: $30 million
• Customer count: +86% YoY

Weaker guidance for Q2 2022

A miss in earnings was small and results were generally solid, a plunge in share price that we can observe today looks to be driven by weaker guidance issued for the current quarter. Palantir said that it expects to generate $470 million in revenue in Q2 2022, lower than $484 million expected by the market. Nevertheless, full-year and mid-term goals were left unchanged - company continues to expect adjusted operating margin of 27% and annual sales growth rate of 30% or more through 2025 on average.

A look at the chart

Palantir Technologies (PLTR.US) has been trading lower since end-Q3 2021. While the stock saw a brief jump in share price following the beginning of war in Ukraine, those gains were completely erased by now. Stock dropped to $7.50 are following today's plunge and as it is marked with a 161.8% exterior retracement of the late-March 2022 upward move ,it can be seen as a short-term support for now.

Source: xStation5