Shares of Palantir (PLTR) are on the rise after Goldman Sachs analyst Christopher Merwin upgraded the stock to Buy, citing the company's fourth-quarter results and first-quarter guidance that called for revenue growth of 45%. Still bearish on the name, Citi analyst Tyler Radke kept a Sell rating on Palantir as he sees "signs of growth drivers narrowing with new customers growth still lacking and commercial revenue missing expectations."

RESULTS: On Tuesday, Palantir reported fourth-quarter losses per share of (8c) and an adjusted profit of 6c per share, including stock-based compensation, with consensus at 2c. The company reported revenue of $322M was better than the expected $300.74M. Palantir also said it sees first-quarter revenue growth of 45% and adjusted operating margin of 23%. For fiscal year 2021, the company expects revenue growth greater than 30%.

BUY PALANTIR: Goldman Sachs analyst Christopher Merwin upgraded Palantir Technologies to Buy from Neutral with a price target of $34, up from $13. The analyst noted that Palantir reported "strong" fourth-quarter results and its first-quarter guidance called for revenue growth of 45%, while fiscal 2021 revenue guidance was for 30%-plus. Further, Merwin is "encouraged" to see management guide to $4B of revenue in fiscal 2025, implying a 30% annual growth from fiscal 2020. With a growing backlog of $2.8B in deal value, there is increasing visibility into the achievability of that long-term target, he added. Further, the analyst believes Palantir's recent efforts to modularize Foundry and add channel partners like IBM "should improve product-market fit" for the commercial business in the coming quarters.

Keeping a Buy rating with a $40 price target on the stock, Jefferies analyst Brent Thill noted that Palantir reported a top and bottom-line beat in the fourth quarter along with "robust" large deal metrics and said it is targeting $4B or more in 2025 revenues. Nonetheless, he believes the stock remains under pressure due to Thursday's lock-up expiry and the recent run-up that saw the stock up 35% year-to-date ahead of the report. Thill views Palantir as "a highly unique story for long-term investors" given its growth sustainability at significant scale and "aggressive profitability ramp" that puts the stock "in rarified air" among software companies.

'GROWTH DRIVERS NARROWING': Still bearish on the stock, Citi analyst Tyler Radke maintained a Sell rating on Palantir Technologies with a $15 price target following the company's fourth-quarter results. The results featured "solid" reported revenue upside, but came with "signs of growth drivers narrowing with new customers growth still lacking and Commercial revenue missing expectations," Radke told investors in a research note. While the new five-year revenue target of $4B "looks high," the analyst believes ultimately it may be a non-event for the stock. Further, he thinks the stock is overvalued and "could be particularly volatile" into the upcoming lockup on February 18.

Meanwhile, Morgan Stanley analyst Keith Weiss raised the firm's price target on Palantir to $19 from $17, telling investors that Palantir's results in fiscal year 2020 showed a big expansion of existing customers, "huge leverage" in operating margins and the seeds for future distribution capability. However, he kept an Underweight rating on the shares as he would like to see evidence of effective investment behind the company's opportunity to support growth and what he views as a "lofty valuation."

PRICE ACTION: In morning trading, shares of Palantir have gained over 4% to $28.96.