Palantir (NASDAQ:PLTR) stock continues its bull run, buoyed by yet another vigorous earnings report that reflected growing revenues, profits, and clientele. The shares have catapulted by 369% over the past twelve months, and the momentum has shown little signs of slowing down in the current year.
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According to CEO Alex Karp, this is just the opening act of Palantir’s story. “We are still in the earliest stages, the beginning of the first act, of a revolution that will play out over years and decades,” he proclaimed in his latest shareholder letter – hinting that the company’s transformation is far from over.
Palantir’s quarterly revenues climbed by 36% year-over-year, with healthy growth from both commercial and governmental sectors. Despite these strong results, Karp warned against complacency, emphasizing the need to capitalize on the company’s unique position to maintain momentum.
While acknowledging the impressive numbers from the Q4 print, investor Daniel Jones just cannot wrap his head around the inflated stock price.
“The valuation at which Palantir Technologies is trading seems to me to be the very definition of insanity,” exclaims the 5-star investor, who sits in the top 5% of TipRanks’ stock pros.
Jones games out a number of different scenarios, ranging from 20% to 40% annual growth through 2027. According to the investor, the most bullish of these possibilities – 40% revenue growth per annum – still cannot justify buying in at PLTR’s current share prices.
“Even incredibly aggressive growth assumptions make the stock look horrifyingly overpriced,” explains Jones. “The stock has gotten absurdly expensive.”
The investor is quick to point out the many reasons to be optimistic about PLTR as a company, noting that the firm should continue to do just fine as AI technologies become more and more ingrained throughout the economy.
And yet, Jones reminds investors that the success of a company is only part of the equation when it comes to picking stocks.
“There is a big difference between doing well and making sense from an investment standpoint,” concludes Jones, who rates PLTR a Strong Sell. (To watch Jones’ track record, click here)
Wall Street isn’t exactly cheering for PLTR either. With just 2 Buy ratings against 10 Holds and 5 Sells, the stock carries a consensus Hold (i.e. Neutral) stance. Adding to the caution, analysts peg its 12-month average price target at $88.60 – suggesting a potential 24.5% downside in the year ahead. (See PLTR stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
