Palantir: Don't Get Burned By The Hype

(9min)

Summary

  • My PLTR rating evolved: "Buy" (Jan '24 dip), then "Hold," "Sell," and back to "Hold" (Apr '25 NATO deal), as the stock surged over 45% since.
  • Palantir shows phenomenal Q1 FY2025 operational strength, beating EPS/revenue estimates, with U.S. revenue up 55% YoY (71% commercial), driven by high AIP demand and strong TCV growth.
  • Strategic wins like the NATO Maven deal and potential "Golden Dome" involvement remain key catalysts. Palantir boasts a strong Rule of 40 score (83%) and robust free cash flow.
  • Despite impressive performance, PLTR's current valuation is extremely high, pricing in a 31.2% EPS CAGR for 10 years, making it appear overvalued even with bullish future assumptions.
  • While acknowledging Palantir's strong business momentum and mission, I reiterate a "Hold" rating. The company is great, but the stock is too expensive for new investment.

Palantir Technologies headquarters campus exterior view in Silicon Valley. - Palo Alto, California, USA - 2019

Michael Vi

My Thesis Update

I wrote my 1st article on Palantir Technologies Inc. (NASDAQ:PLTR) in January 2024 with a "Buy" rating, arguing at the time that its dip was a real gift. But as the stock price kept expanding, the

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This article was written by

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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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