Palantir, the controversial data analytics startup headed by PayPal co-founder Peter Thiel, faces issues in its business model that could threaten the company’s future prospects, analysts have said.

Initiating its coverage on the stock, Goldman Sachs said in a note that Palantir’s outsized reliance on contracts from the US government and its allies have created a trend of “lumpy deal activity”, meaning its projects have high costs, lengthy durations and appear infrequently.