Palantir Stock Cheapest It Has Been in Three Years as Earnings Loom
Palantir Technologies (NASDAQ: PLTR ) has come under intense selling pressure this year as investors rotated out of high-growth software companies and locked in profits following the stock’s exceptional rally last year. This sell-off has made it a bargain ahead of its earnings on Monday. Palantir Stock Has Become a Bargain Palantir has always been one of the most expensive stocks in the United States because of its strong revenue and profitability growth. It is still a highly overvalued company, with its trailing and forward price-to-earnings (P/E) ratio being 129 and 83, respectively. These multiples are much higher than the technology sector median of 24. However, these multiples are substantially lower than where they were a while ago. Its trailing P/E ratio has dropped from last year’s high of 454. It has dropped to the lowest level in over three years. The forward multiple...
Palantir Technologies (NASDAQ: PLTR ) has come under intense selling pressure this year as investors rotated out of high-growth software companies and locked in profits following the stock’s exceptional rally last year.
This sell-off has made it a bargain ahead of its earnings on Monday.
Palantir Stock Has Become a Bargain Palantir has always been one of the most expensive stocks in the United States because of its strong revenue and profitability growth.
It is still a highly overvalued company, with its trailing and forward price-to-earnings (P/E) ratio being 129 and 83, respectively.
These multiples are much higher than the technology sector median of 24.
However, these multiples are substantially lower than where they were a while ago.
Its trailing P/E ratio has dropped from last year’s high of 454.
It has dropped to the lowest level in over three years.
The forward multiple is also the lowest it has been in years, and is much lower than the five-year average of 127.
More data, especially the Rule-of-40 metric, suggests that the company is relatively undervalued.
In its last financial result, the company noted that its multiple jumped to 145%, much higher than 64% in the second quarter of 2024.
The Rule-of-40 is an important metric used to value software companies.
It looks at a company’s revenue growth and its profit margin.
A company is said to be a bargain whenever the multiple jumps above 40.
Read Also: SpaceX First Earnings After IPO Are Here: How Is the Options Market Positioning? Palantir Technologies Earnings are Coming Up The next important catalyst for the PLTR stock will be the upcoming earnings, which will provide more color on their business. data shows that analysts expect the company to report revenue of $1.8 billion, representing an 80% year-over-year increase.
They also forecast third-quarter revenue guidance of approximately $2.0 billion, implying another 70% annual growth.
The average estimate is that its earnings per share will come in at 35 cents, up sharply from the 16 cents it made last year.
Palantir has a long track record of doing better than estimates.
The options market suggests that many traders are positioning for a rebound in Palantir stock after its upcoming earnings release.
Options expiring later this week have a put/call ratio of 0.47, indicating that bullish call options significantly outnumber bearish put options.
Analysts are also highly bullish on Palantir, citing its strong growth in US government and commercial revenue.
The average estimate among analysts is $190, representing a 54% upside from the current level.
Rosenblatt Securities recently reiterated a buy rating with a $225 target.
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