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Palantir: Risk-Reward Is Not In Your Favor For The Long Run

Nov. 02, 2021 7:30 AM ETPalantir Technologies Inc. (PLTR)121 Comments


  • In this article, I speculate on what questions you should ask yourself before buying PLTR stock.
  • Even if we think of the company as a technology startup, its revenue growth does not seem to be financially healthy - follow the Rule of 40.
  • PLTR's business model says we can value the company by SOTP - but even if we include revenue growth rates in our model, the stock turns out to be grossly overvalued.
  • The behavior of Karp and his team suggests that Palantir is something of a "cash cow". And bulls always buy whatever management systematically dumps in the market.
  • Ultimately, the risk/reward ratio is not on the side of long-term investors - so I would not recommend buying the stock as long as it is managed the way it is managed now.
Annual Allen And Co. Meeting In Sun Valley Draws CEO"s And Business Leaders To The Mountain Resort Town

Drew Angerer/Getty Images News


Palantir's (NYSE:PLTR) 10-Q report is just around the corner and the bulls are frozen in anticipation of strong quarterly results that will finally allow the stock to come off the flat price channel and rise. I do not doubt

This article was written by

Danil Sereda profile picture
Discover What Wall Street Is Buying

The chief investment analyst in a small family office registered in Singapore, responsible for developing investment ideas in equities, setting parameters for investment portfolio allocation, and analyzing potential venture capital investments.

A generalist in nature, common sense investing approach. BS in Finance. The thesis description can be found in this article.

During the heyday of the IPO market, I developed an AI model [in the R statistical language] that returned an alpha of around 24% over the IPO market's return in 2021. Currently, I focus on medium-term investment ideas based on cycle analysis and fundamental analysis of individual companies and industries.

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**Disclaimer: Associated with Oakoff Investments, another Seeking Alpha Contributor

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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