PALANTIR - STOCK REPORT1) Executive summary
Palantir (PLTR) showed very strong revenue growth in 2023–2025 driven by commercial expansion and adoption of its platforms (Gotham, Foundry) across government and private sectors. As of September 2025 the company is clearly profitable on a TTM basis with positive operating margins, strong cash generation (high FCF) and a sizable net cash position. However, relative valuation is extremely high (P/S, EV/Rev, P/E multiples well above peers), reflecting aggressive growth expectations and strong speculative interest.
Main risks: high sensitivity to AI sentiment, reliance on large government contracts and a concentrated commercial customer base, potential regulatory pressure and share-price volatility.
Short recommendation: Hold.
Rationale: financial strength and growth justify exposure, but valuation requires the company to deliver continued high growth and margins; new purchases should wait for a pullback or operational confirmations (stabilized growth rate and guidance). Risk-seeking/high-return investors may consider a partial position.
2) Key data and company overview
Name: Palantir Technologies Inc.
Sector: Software — Data analytics / Enterprise AI
Primary market: NYSE/NASDAQ (Class A) — Ticker: PLTR
Business brief: Software platforms for data integration, analytics and decision‑making (Gotham for governments, Foundry for enterprises, Apollo for deployment). Revenue model: software licenses, SaaS/cloud subscriptions, implementation services and multi‑year government contracts. Main geographies: USA (largest weight, both government and commercial), Europe, expanding APAC.
Market & key metrics (sources: StockAnalysis / MarketBeat / Macrotrends; close price 22‑Sep‑2025):
- Market cap: ~425–433B USD
- Shares outstanding: ~2.365B
- Float: ~2.19B
- P/E (TTM): ~560–595
- EV/EBITDA (TTM): ~700
- Last close (22‑Sep‑2025) used: 179.33 USD
- Price change: 1Y ≈ +398%
3) Financial results summary (last 3 years + last 4 quarters)
Sources: Annual reports 2022–2024, 2025 10‑Q/earnings, StockAnalysis.
TTM / annual rounded (USD millions):
- Revenue (TTM): 2.87B
- Net income (TTM): 462.19 M USD
- Operating income (TTM): 569.55 M
- Diluted EPS (TTM): 0.30
- Free cash flow (TTM): ~1,710
- Operating margin (TTM): 26.83%
- Net margin (TTM): 32.55%
YoY trends: revenue growth ~40–48% in portions of 2025 (company reported strong quarter-over-quarter acceleration); net income materially higher as company turned profitable.
Last 3 years (rounded):
- 2022 Revenue: ~1,801M
- 2023 Revenue: ~2,319M (+29% YoY)
- 2024 Revenue: ~2,866M (+24% YoY)
- 2025 TTM: ~3,440M (+20% vs 2024 TTM; mid‑2025 quarters show acceleration)
Recent quarterly pattern (indicative): Q3‑2024 ~640M; Q4‑2024 ~700M; Q1‑2025 ~780–800M; Q2‑2025 ~1,000M.
Comment: strong commercial acceleration in 2024–H1 2025, especially U.S. commercial; profitable on TTM with high FCF, though EPS/margins affected by stock‑based comp and non‑cash items.
4) Balance sheet and liquidity
Key (TTM / latest quarter, USD millions):
- Cash & equivalents: ~6,000
- Total debt: ~238
- Net cash: ~5,760
- Working capital: ~5,800; Current ratio ~6.3; Quick ratio ~6.19
- Debt/Equity: ~0.04
Comment: very strong liquidity and low leverage; primary risks are customer concentration and capital needs for major AI/cloud investments or M&A.
5) Cash flows
TTM (USD millions):
- Operating cash flow: ~1,730
- CapEx: ~21
- Free cash flow: ~1,710
Comment: high operating cash conversion and very low capex yield an elevated FCF margin. Increased investment in cloud/AI or acquisitions could raise capex and cash use.
6) Valuation
Peers: Snowflake (SNOW), CrowdStrike (CRWD), Splunk (SPLK).
Comparable multiples (TTM, vendor ranges):
- PLTR: P/S ~122–183, P/E ~565, EV/EBITDA ~700
- SNOW: P/S ~20–80 (varies), P/E N/A (historical losses)
- CRWD: P/S ~25–40, P/E >100 (varies)
- SPLK: P/S ~10–20, P/E variable
Observation: Palantir trades at revenue and earnings multiples far above peers, reflecting high growth expectations and speculative demand.
Simple DCF (assumptions stated):
Base revenue TTM = 3,440M.
Growth assumptions: 2026 +30%, Yr2 +15%, Yr3 +10%, Yr4 +6%, Yr5 +5%; terminal growth 3.5%.
EBIT margin converging to 18%; tax 18%; CapEx = 1% of revenue; WACC = 9%. Result: implied fair value per share roughly in the range ~8–25 USD (highly sensitive to assumptions).
Sensitivity: lower WACC / higher terminal growth materially raises value; higher WACC or lower growth materially lowers it.
Detailed year‑by‑year DCF is available on request.
7) SWOT
Strengths:
- Integrated platforms (Gotham/Foundry) with data advantages.
- Strong net cash position and high FCF.
- Rapid commercial AI adoption and high customer retention.
- Strategic government contracts with entry barriers.
Weaknesses:
- Revenue concentration in a few large clients/government.
- High share‑price volatility and valuation disconnect vs peers.
- Dependence on costly AI/R&D talent.
- Historical share dilution.
Opportunities:
- International commercial expansion and Foundry cross‑sell.
- Monetization of advanced AI/cloud offerings.
- Partnerships with hyperscalers.
- Upsell within regulated enterprises.
Threats:
- Regulatory pressure on data/AI use.
- Intensifying competition (Snowflake, Databricks, cloud vendors, AI startups).
- Reputational risks tied to government contracts.
- AI sentiment correction reducing valuation.
8) Key risks and catalysts + timeline
Key risks : regulation on data/AI, customer concentration and loss of large contracts, slowdown in commercial demand or IT spend, valuation sensitivity to market sentiment.
Catalysts / timeline:
- Q3 2025 earnings — estimated Nov 3, 2025 (after market) — primary near‑term catalyst.
- Major government contract announcements or large ARR renewals (timing variable).
- Product/feature releases and cloud partnerships (ongoing).
9) Final recommendation and risk positioning
Operational recommendation: Hold .
Time horizon: medium term (12–24 months) to monitor growth consolidation and margin confirmations.
Risk/return profile: High risk / potentially high reward — elevated valuation creates meaningful downside if growth slows; upside depends on sustaining high growth and margins. Risk‑tolerant investors who believe in Palantir’s AI/commercial momentum may hold or take a partial position with risk controls; risk‑averse investors should avoid new purchases until valuation normalizes.
10) Sources and data date
Main sources: Palantir Investor Relations (SEC 10‑K / 10‑Q / earnings releases), TradingView, public research notes. Data date: 22 September 2025. Assumptions: market cap ~428B; close price 22‑Sep‑2025 = 179.33 USD; shares outstanding = 2.365B.
