A recent U.S. Army presentation is sounding alarms for investors in Palantir (NYSE:PLTR).
During an industry event at Fort Belvoir, Virginia, U.S. Army officials revealed plans to overhaul the Army Data Platform, formerly known as the Vantage dashboard. According to William Blair analyst Louie DiPalma, the comments made at the event indicate potential problems with Palantir, the current Vantage prime contractor.
Palantir’s $458 million contract, which started in December 2019, is set for renewal in less than two weeks. However, remarks by Brian Raftery, the U.S. Army’s PEO EIS’s Army Data and Analytics Platforms’ (ARDAP) project manager, hint at conflicts surrounding data ownership and the potential for changes that could disrupt the current arrangement.
Raftery’s comments express concerns about the treatment of Army data by its vendors, specifically alluding to issues with Palantir’s commercial licensing IP model as the exclusive commercial software provider for Vantage.
The potential conflict arises from Palantir’s practice of selling commercial software licenses to the Army, creating concerns about data ownership and the potential for vendor lock-in pricing dynamics. This unique problem with Palantir’s business model leads DiPalma to believe that the upcoming contract renewal will likely be significantly lower than the original $458 million agreement.
DiPalma’s assessment is pessimistic – he rates PLTR shares as Underperform, without providing a fixed price target. Other analysts believe that Palantir shares will drop by approximately 18% over the next year, given the stock’s Hold consensus rating.
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
