Citi analyst Tyler Radke raised his revenue growth estimate for Palantir to 53% for fiscal 2027, sharply above Wall Street's 45% consensus, even as PLTR shares sat around $131.82 on Thursday, down roughly 20.5% over the past six months. He kept his Buy rating but pulled the price target down to $200 from $225, blaming multiple compression rather than any crack in the company's fundamentals.
The core of Radke's bullish thesis is a recovery in Palantir's US Commercial segment, which stumbled unexpectedly in Q1. "We expect US Commercial to rebound after an unexpected deceleration in Q1, driven by improved resource prioritization and AIP proliferation across new industries and geographies," Radke wrote in a client note. He's looking for US Commercial Remaining Deal Value net adds to climb back to the $800 million-plus range seen in the second half of 2025, a level that should push estimate revisions higher heading into 2027.
What the field checks showed
Radke's intra-quarter conversations with partners and management came back "largely positive," with momentum from global systems integrators and independent software vendors holding steady. AIPCon 10 produced notable customer wins in the Legal and neocloud verticals. On the international side, he flagged a sizable insurance win in Mexico and a deepening Palantir-Nvidia relationship in the Sovereign segment. Federal demand looked solid too, with expanding use cases inside the Department of Defense at the AWS Summit and the USDA contract expected to provide a tailwind in the back half of the year.
The underlying numbers back up the optimism. Palantir's billings hit $1.74 billion in Q1, with year-over-year growth averaging 67.6% over the last four quarters. Free cash flow margin averaged 54.1% over the past year, a figure that puts the company among the best performers across enterprise software. Customer acquisition cost payback came in at just 5.3 months this quarter, meaning Palantir recoups what it spends on winning new clients faster than nearly any peer in the space. That kind of efficiency gives it room to expand into new products without burning through its sales budget. For investors tracking high-growth tech names, this story sits in the same broad conversation as leveraged instruments tied to large-cap tech indices that have attracted fresh attention lately.
Radke did acknowledge that competitive displacements have ticked up, but argued that a growing base of reference customers should keep the sales motion running. Palantir reports its next quarterly results soon, and the market will be watching US Commercial figures closely.
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