Why I'm Downgrading Palantir Despite Blowout Earnings

Bram de Haas
19.67K Followers
(10min)

Summary

  • Palantir's U.S. commercial growth is impressive, with a 64% increase, overshadowing the anemic 4% growth in Europe, raising concerns about the company's international strategy.
  • Despite strong earnings and increased guidance, Palantir's high valuation at 60x forward sales and 333x forward earnings necessitates sustained high growth to justify its price.
  • The company's dismissive attitude towards its European performance and potential image problems could be hindering its growth, despite the high demand for AI solutions.
  • Given the impressive U.S. growth but concerning European performance and high multiples, I am downgrading Palantir to a "hold" from "buy" as the risk-reward balance has shifted.

Palantir Technologies headquarters campus exterior view in Silicon Valley. - Palo Alto, California, USA - 2020

Michael Vi

Palantir (NASDAQ:PLTR) just reported earnings, and they were received very well. Yet, I'm downgrading to a "hold" from "buy" for a number of reasons. Over the years I've always found its business model with great potential for strong competitive advantages very enticing. The wildly different

This article was written by

19.67K Followers
Bram de Haas brings 15 years of investing experience to the table and has over 5 years of experience managing a Euro hedge fund. He is also a former professional poker player and utilizes his bundle of risk management skills to uncover lucrative investments based on special situations.

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.

Recommended For You

About PLTR Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on PLTR

Related Stocks

SymbolLast Price% Chg
PLTR
--