Palantir (NASDAQ:PLTR) has built its success on the traction its AIP (artificial intelligence platform) has gained, and its commercial momentum appears to be continuing to accelerate.
On Tuesday, the company unveiled a fresh lineup of previously undisclosed participants for its upcoming AIPCon customer conference on March 13. William Blair analyst Louie DiPalma pointed out an increase in new names, spotting nine unfamiliar logos, including Walgreens, which is transitioning to private ownership; hospital revenue cycle management firm R1 RCM; private equity giant KKR; autonomous vessel maker Saildrone; Delta Air Lines; Heineken; and document automation firm Ripcord.
The logos represent a diverse range of industries, but DiPalma thinks Walgreens’ inclusion is particularly interesting as during its recent earnings call, Palantir mentioned that a major U.S. pharmacy recently signed a $67 million engagement for load-balancing prescription fulfillment and patient outreach. “It is not clear whether this $67 million contract was for Walgreens or CVS, which also appears to be an unannounced Palantir customer based on our tracker,” the analyst noted.
The analyst’s commercial customer tracker includes 174 logos, a significant portion of Palantir’s 571 officially reported commercial customers from its Q4 earnings call. DiPalma thinks it is “impressive how such a high percentage of Palantir customers are willing to service as reference customers.” Palantir has effectively leveraged these reference customers to drive customer acquisition, thereby reducing the need for a large sales force. For instance, between 2022 to 2024, the company’s revenue climbed by 50%, while the headcount expanded by just 3%.
Even more impressive, Palantir’s combo of projected 31% revenue growth and 45% operating margin for 2025 ranks amongst the highest in the software industry. The catch? Its valuation is also leading the pack, and not in a good way.
The stock is currently trading at around 100 times its projected 2026 free cash flow, albeit down from its recent multiple of 125. Nevertheless, that is some distance above other high-multiple software companies such as MongoDB at 55 times, CrowdStrike at 34 times, and its closest peer, Snowflake, at 39 times. And that is a stumbling block for DiPalma.
“Even though Palantir has a rich pipeline and positive catalysts, we expect shares to be range-bound due to its premium valuation and the potential for government budget risk,” the analyst summed up.
Accordingly, DiPalma rates PLTR shares as Market Perform (i.e., Neutral) and has no fixed price target in mind. (To watch DiPalma’s track record, click here)
Most other analysts are on the sidelines here too; the stock’s Hold consensus rating is based on 10 Holds, and 4 Buys and Sells, each. At $95.33, the average price target represents one-year returns of 14%. (See PLTR stock forecast)
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