Palantir Q4: Sell Now To Avoid Pain Later (Rating Downgrade)

Oliver Rodzianko
3.05K Followers
(13min)

Summary

  • Palantir’s Q4 revealed a 45% operating margin and 36% revenue growth, but its shares reflect over five years’ growth already, prompting a Strong Sell rating based on valuation.
  • CEO Alex Karp and Peter Thiel guide a strong AI vision, with Q4’s 81% rule of 40 showcasing profitability, yet the firm’s lofty price-to-sales ratio risks a volatile downturn.
  • Despite a 15.749% cost of equity, and government revenues over 50%, Palantir’s Commercial growth and AI moat remain compelling—yet long-term stock overpricing justifies a Strong Sell.
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Since my last analysis of Palantir (NASDAQ:PLTR) stock, it has gained approximately 100% in price. I issued a Sell rating at the time, and as I consider the current valuation to be much worse than before, my rating is now downgraded to a

This article was written by

3.05K Followers
Oliver Rodzianko is an investment analyst specializing in the technology sector, grounded in timeless value principles. His expertise spans AI, semiconductors, software, and renewable energy, with a focus on companies that demonstrate resilient management and lasting competitive advantages. A trusted voice in financial analysis, Rodzianko’s insights are frequently highlighted as 'Must Reads' on Seeking Alpha, syndicated to Forbes via GuruFocus, and published on TipRanks.Rodzianko specializes in value trading at inflection points without leverage and without short interest. He typically holds investments for one to two years, selling them at fair value. Additionally, he models a wealth-preservation portfolio and employs advanced risk-mitigation strategies to protect against and capitalize on recessions and market crashes. Rodzianko Asset Management Rating System:Strong Buy: For value trading, Oliver Rodzianko anticipates an annual return of 30% or above for the time period specified in the analysis. For long-term investments, an annual return of 20% or above is expected for the time period specified in the analysis.Buy: For value trading, Oliver Rodzianko anticipates an annual return of 25% or above for the time period specified in the analysis. For long-term investments, an annual return of 15% or above is expected for the time period specified in the analysis.Hold: For value trading, Oliver Rodzianko anticipates an annual return of 15% or above for the time period specified in the analysis. For long-term investments, an annual return of 10% or above is expected for the time period specified in the analysis.Sell: For value trading, Oliver Rodzianko anticipates an annual return of at least 0%, but generally well below 10%, for the time period specified in the analysis. For long-term investments, he similarly expects an annual return of at least 0%, yet typically under 10%, for the time period specified in the analysis.Strong Sell: For value trading, Oliver Rodzianko anticipates zero or negative annual returns for the time period specified in the analysis. For long-term investments, he similarly anticipates zero or negative returns for the time period specified in the analysis.

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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