Stock Analysis
Palantir Technologies Inc. (PLTR)
NASDAQ: PLTR · Data Analytics & AI Platforms – Government & Commercial
Updated
Rated Watchlist, with a fair value of $172.12 against a last close of $186.03 (-7.5% implied upside). The shares ran to a $209.05 close on 9 October and fell back to $186.03 with no company news in between; the business is exceptional, but the price sits above a $172 fair value and the name becomes interesting near $150.
- Verdict
- Watchlist
- Fair Value
- $172.12
- Investment Score
- 64.4/100prev 64.5
Technical read (chart only): Conflicts as of Uptrend above a rising 50-day average, so the chart is ahead of the fundamentals case; watch closely without changing the rating. A close below the 20-day low near $177 would be the first break.The Watchlist verdict comes from the fundamentals alone. The technical read looks only at the price chart. It does not change the verdict or the score and only guides entry timing.
Investment Scorecard
Composite score 64.4/100 (previous 64.5). Every factor is scored out of 10, ten always being the best outcome, including for risk.
| Factor | Score | Weight | Change | Basis |
|---|---|---|---|---|
| Business Quality | 9/10 | 15% | unchanged | Q2 adjusted operating margin 62% and adjusted FCF margin 63%; no new disclosure since. |
| Financial Strength | 9/10 | 8% | unchanged | $9.2bn of cash and short-term Treasuries, negligible debt. |
| Competitive Advantage | 8/10 | 13% | unchanged | US commercial TCV $2.13bn in Q2, up 153%; wins continue in banking and aviation. |
| Management | 9/10 | 10% | unchanged | FY26 guidance raised in August to $8.15-8.16bn revenue. |
| Growth Potential | 9/10 | 17% | unchanged | FY26 revenue guided up 82%; consensus FY27 growth 50%. |
| Valuation | 2/10 | 21% | unchanged | 79x FY27 consensus EPS and about 57x FY26 revenue. |
| Risk (10 = lowest risk) | 3/10 | 16% | unchanged | A multiple with no room for error, stopgap federal funding to 11 December and steady insider selling. |
Recent Developments
| Date | Development | Impact |
|---|---|---|
| Q3 2026 results Date confirmed; guide of $2.160-2.164bn revenue and $1.292-1.296bn adjusted operating income. Reading: The guide implies about a 60% margin, the test the last two reports set. | Medium | |
| Sovereign AI stack with Nebius Partnership to offer Palantir customers Nebius infrastructure for sovereign deployments; no financial terms. Reading: Widens the sovereign offer without new capital; too early to size. | Medium | |
| Federal stopgap funding to 11 December A continuing resolution funds the government to 11 December 2026; full-year FY27 appropriations not passed. Reading: Tends to delay new government awards rather than cut running programmes. | Medium | |
| London police contract dispute settled Both sides withdrew allegations over the blocked two-year, £50m Metropolitan Police contract; a new award is due in spring. Reading: Removes a court case but not the block; small in revenue terms. | Low |
Key Risks
| Risk | Probability | Severity | Comment |
|---|---|---|---|
| Multiple compression | High | High | At 79x FY27 EPS a slower growth path or a sector derating cuts the price sharply. |
| Retention or deal-size slowdown | Low-medium | High | Would undercut the US commercial engine. |
| Q3 margin step-down | Medium | Medium | The guide implies about 60% after 62% in Q2. |
| Government funding delays | Medium | Medium | Stopgap funding to 11 December. |
| Insider supply | High | Low | Regular director and officer sales. |
| Political and procurement risk abroad | Medium | Low | The London police contract remains blocked. |
Scenario Analysis
| Case | Probability | Fair Value | Outlook |
|---|---|---|---|
| Bull | 26% | $240.50 | US commercial keeps compounding, Q3 margin holds near 60%, FY27 beats consensus and growth stays near 40% in FY28; FY28 EPS about $3.70 at 65x. |
| Base | 49% | $173.25 | FY27 in line with consensus ($12.3bn revenue, EPS $2.35); FY28 growth eases to the mid-30s; FY28 EPS about $3.15 at 55x. |
| Bear | 25% | $98.80 | Growth slows faster as large deals take longer and federal funding stays on stopgaps; software multiples compress; FY28 EPS about $2.60 at 38x. |
The Case
Not at $186.03. Palantir grew revenue 93% in Q2 at a 62% adjusted operating margin, but at 79 times FY27 consensus EPS the price already assumes that pace lasts into 2028.
The weighted fair value is $172 and the base case $173, so a new buyer is paying for the bull case. The biggest risk is multiple compression, which took 7% off the shares on 16 October with no news. The view improves at about $150 or on a Q3 report on 2 November that holds the margin near 60%.
Archived Reports
Beating The Bull keeps every past version of this report on file. Verdicts and numbers reflect what was known when each one was published.
Informational use only. Not financial advice.