Palantir: It's Unlikely To End Well

(14min)

Summary

  • Palantir's stock is driven by unrealistic expectations rather than fundamentals, despite impressive growth in AI-driven government and commercial segments.
  • Indeed, the company's Q3 performance was strong, with a 30% YoY revenue increase and an 8th consecutive quarter of margin growth.
  • Despite robust financials and AI advancements, excessive share dilution and insider selling raise concerns about long-term sustainability.
  • The last time I looked at PLTR in early September this year, the stock was trading at 86.7x forwarding P/E. Now, it's trading at 177.2x - 104% higher.
  • I maintain my "Hold" rating on Palantir this time as I believe that the current overvaluation might not end well for today's buyers in 2-3 years.
  • Looking for a helping hand in the market? Members of Beyond the Wall Investing get exclusive ideas and guidance to navigate any climate. Learn More »

Palantir Technologies

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Intro & Thesis

I've been covering Palantir Technologies Inc. (NASDAQ:PLTR) here on Seeking Alpha since October 2021, initially rating the stock as a "Sell" due to its overvaluation and seemingly limited growth at the time. My bearish calls were

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This article was written by

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Daniel Sereda is chief investment analyst at a family office whose investments span continents and diverse asset classes. This requires him to navigate through a plethora of information on a daily basis. His expertise is in filtering this wealth of data to extract the most critical ideas. He runs the investing group Beyond the Wall Investing in which he provides access to the same information that institutional market participants prioritize in their analysis. Learn more.

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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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