Palantir Technologies (PLTR) After New AI Deals And Government Wins Looks Fully Valued
Palantir Technologies (PLTR) is back in focus after a series of AI focused partnerships and government wins, including new work with the U.S. Small Business Administration and enterprise clients across insurance and cloud infrastructure.
See our latest analysis for Palantir Technologies.
Despite the stream of new AI partnerships and government work, Palantir Technologies’ share price has been under pressure, with the stock down 21.14% on a year to date share price return and the 1 year total shareholder return also negative, even though the 3 year total shareholder return is around 7x.
If Palantir’s AI momentum has your attention, it can be useful to see what else is out there in this space, starting with 62 profitable AI stocks that aren't just burning cash.
Palantir Technologies is now trading well below both its recent peak and the average analyst price target. Where might a reasonable view of fair value sit across that spread as you weigh the next move on the stock?
Most Popular Narrative: 23.7% Overvalued
According to the most followed narrative on Palantir Technologies, the stock’s fair value of $107.02 sits well below the last close at $132.38, which creates a wide gap that investors are trying to make sense of.
Palantir remains an exceptional company with groundbreaking technology and a clear mission. I have high conviction in its long-term potential and believe it could evolve into another Salesforce, Oracle, or SAP. However, even when factoring in flawless execution and strong future growth, the stock appears overvalued following recent price surges.
Want to see how this fair value was built? The core of the narrative is aggressive revenue expansion, rising profit margins and a premium earnings multiple usually reserved for established software giants.
Result: Fair Value of $107.02 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this overvaluation case for Palantir Technologies could be challenged if AI demand cools more quickly than expected or if government contract momentum slows meaningfully.
Find out about the key risks to this Palantir Technologies narrative.
Another Take on Palantir’s Fair Value
The most popular Palantir Technologies narrative points to the stock trading about 23.7% above its estimated fair value of $107.02, but the Simply Wall St DCF model paints a different picture, with a future cash flow value of $150.58 versus the current $132.38 share price. This raises a simple question: which story do you trust more when the models disagree?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Palantir Technologies for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 47 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
With mixed views on Palantir Technologies in mind, it can be useful to move quickly, review the numbers yourself and decide where you stand. To see what has investors optimistic, take a closer look at the 3 key rewards.
Looking for more investment ideas beyond Palantir Technologies?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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