Palantir's earnings growth

Palantir shares fell amid a correction in the stock market despite the company reporting strong revenue growth in the first quarter, exceeding Wall Street forecasts. Palantir's earnings growth is forecast to slow in the second quarter, but estimates also beat analysts' expectations.

Palantir Technologies (PLTR) shares, down 21.6% YTD, fell more than 9% before trading opened on Tuesday amid a general decline in technology stocks and the Nasdaq Composite index due to inflation fears and interest rate hike risks. However, Palantir's share price rose in early trading.

Palantir, which sells big data analytics software services, went public through a direct listing in September last year. After hitting a high price of $45 on 27 January, Palantir shares have fallen almost 58%, but are still 55.5% higher than six months ago.

Prior to the opening of trading on Tuesday, Palantir published a report on its first quarter 2021 financial results, which ended on 31 March.

Palantir reported a 49% year-on-year increase in total revenues to $341m, exceeding analysts' estimates of $332.2m.

In April, Palantir reported receiving a 5-year contract worth up to $90 million from the National Nuclear Security Administration (NNSA).

Palantir had 149 clients as of the last quarter, up from 125 clients in the first half of last year. The average revenue from Palantir's top twenty customers in 2020 was $36.1 million.

Commenting on the growth in commercial segment orders, Palantir management pointed to the favourable factors of the US and UK economic recovery, which helped boost demand for the company's services. Palantir's free cash flow, which represents funds available for investment, rose to $151 million at the end of the first quarter, up from negative a year ago.

Forecast from Palantir

The company said it expects second-quarter revenues to rise 43% year-on-year to $360m, which is also above analysts' average forecasts of $344.3m.

Palantir expects average revenue growth of 30% or more from 2021 to 2025.

Commenting on the financial report, Palantir's management said that the company accepts bitcoins as a form of payment and is considering adding the cryptocurrency to its balance sheet.