Palantir Technologies, Inc. (NASDAQ:PLTR) stock has been on a broader downtrend since late September. Despite the lackadaisical trading in the stock, the fundamental story is still solid, according to an analyst at Piper Sandler.
The Palantir Analyst: Weston Twigg reiterated an Overweight rating on Palantir shares and nudged up the price target from $15 to $16.
The Palantir Thesis: Palantir is likely to continue to see growth with its U.S. government business as it expands its footprint across agencies, analyst Twigg said in a note. The analyst expects Defense, the company's largest customer, to grow further.
Beyond Defense, the company now serves other agencies such as the Department of Veterans Affairs and Department of Energy, the analyst noted. This will likely drive 10-20% annual growth for its U.S. Government business over the next few years, he added.
COVID, Twigg said, was a catalyst, as Palantir stitched up partnerships with several government agencies such as the CDC, FDA, NIH and the Air Force, the analyst noted. The initial use cases are likely serving as catalysts for further adoption, he added.
"We view the U.S. government as a stable source of revenue as PLTR targets rapidly-growing commercial expansion," Piper Sandler said.
Palantir Price Action: Palantir stock was seen trading down 0.65% at $12.25, according to Benzinga Pro data.
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