$PLTR is expected to increase its earnings by $25 MILLION this quarter
But added $10 Billion in value TODAY alone
And added +$100 Billion to its Market Cap this quarter
Let that sink in.
— The Long Investor (@TheLongInvest) December 6, 2024
The stock market has always been a rollercoaster ride, but Palantir Technologies’ (PLTR) recent valuation is making even seasoned investors scratch their heads. In 2024, PLTR’s stock has skyrocketed by an astonishing 344%, largely driven by the hype around artificial intelligence and government contracts. However, this meteoric rise doesn’t seem to align with the company’s actual financial performance.
Palantir’s revenue growth, while impressive, doesn’t justify the current stock price. In Q3 2024, the company reported a 30% increase in revenue to $726 million, but this pales in comparison to the stock’s valuation, which is now trading at a staggering 62 times sales. Analysts are skeptical, with many recommending a sell rating on the stock due to its overvaluation.
The most shocking detail is the disconnect between Palantir’s stock performance and its earnings. Despite the stock quadrupling in value, the company’s earnings growth hasn’t kept pace. For example, while Palantir is expected to increase its earnings by $25 million this quarter, it added $10 billion in value today alone and an incredible $100 billion to its market cap this quarter. Moreover, the price-to-cash flow ratio stands at an astounding 154x, raising concerns about the sustainability of its current valuation. Historically, such high valuations have often preceded significant corrections in stock prices.
While Palantir’s role in the AI revolution and its government contracts are noteworthy, the current stock valuation seems disconnected from its financial reality. Investors should approach with caution and consider the broader market context before making any decisions.
$PLTR valuation makes ZERO sense
But then why do institutions keep buying it?
What do they know that you don't?I work in BIG DATA analytics and let me share the secrets of Palantir in the most basic way
Palantir has monopoly on Automated Governance, serving as the ultimate… pic.twitter.com/XGLRmO7rq8
— Trade Whisperer (@TradexWhisperer) December 7, 2024
Honest question for Palantir $PLTR shareholders: do you believe the current valuation is sustainable? pic.twitter.com/T4Q7A5meGF
— Investing visuals (@ZeevyInvesting) December 6, 2024
Sources:
https://www.yahoo.com/news/m/be729a4b-4be9-39c3-b232-f48bab2c5685/palantir-rally-keeps-going-.html
https://www.fool.com/investing/2024/12/06/where-will-palantir-technologies-stock-be-in-1-yea/
https://www.fool.com/investing/2024/12/08/palantirs-stock-quadrupled-in-2024-can-it-repeat-i/