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2026-11-04 12:15:44 China Merchants Securities International published a research report stating that US Department of Defense supplier and big data service provider Palantir Technologies Inc. (PLTR.US) reported third-quarter revenue of USD2.3 billion, up 96% YoY. Adjusted EPS was USD0.44, 7.3% above market expectations. Its Rule of 40 score reached 158%, up 3 ppts QoQ, marking the 13th consecutive quarter of improvement and the 10th consecutive quarter of results beating expectations. Adjusted free cash flow was USD1.22 billion, up 125% YoY, with a free cash flow margin of 53%. Cash generation capability remained strong, with cash and US Treasuries totaling USD10.4 billion at period-end, prompting investors to anticipate shareholder returns. The company guided fourth-quarter revenue at about USD2.6 billion and adjusted operating profit at about USD1.64 billion. It also raised full-year revenue guidance by 4.6% to about USD8.5 billion, representing YoY growth of 91%, while US commercial revenue guidance was raised to at least USD3.6 billion, up 143% YoY. The broker noted that US commercial revenue reached USD984 million, up 148% YoY, surpassing US government revenue of USD953 million for the first time, indicating a shift in the growth engine from defense contracts to enterprise clients. Total commercial revenue amounted to USD1.17 billion, up 113% YoY, also exceeding government revenue of USD1.15 billion, which grew 81% YoY. Global total contract value (TCV) rose 6% YoY, compared with 49% YoY growth in the second quarter. Management said shorter contract durations and faster deployment for initial commercial deals objectively weighed on TCV growth, though no quantitative impact was disclosed. The market expects the company's revenue in 2026 and 2027 to grow 88% and 51% YoY to USD8.41 billion and USD12.68 billion, respectively, corresponding to forecast 2026/2027 price-to-sales ratios of 51x and 34x. The market also expects 2026/2027 non-GAAP net profit to increase 122% and 48% YoY to USD4.26 billion and USD6.32 billion, respectively, corresponding to 2026/2027 non-GAAP P/E ratios of 101x and 68x. The broker believes the third-quarter results further validated that the value of enterprise AI is concentrating in integration and orchestration layers rather than the model layer. For the sector, platforms with proprietary data access and deep workflow integration stand to benefit, while vendors simply reselling model APIs will see limited gains. The broker continues to favor the US AI internet sector, with unchanged preference ranking: Meta Platforms, Inc. (META.US) > Microsoft Corporation (MSFT.US) > Amazon.com, Inc. (AMZN.US) > Alphabet Inc. (GOOGL.US). For the China market, preferred picks are TENCENT (00700.HK) and BABA-W (09988.HK). The broker has no rating on Palantir Technologies Inc. (PLTR.US). (da/ad)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |