The ascent of the action from $ 6 to more than $ 100 in just over two years is one of the most incredible hot sequences of Wall Street.
It is difficult to believe that PALANTOUT Technologies (Pltr -0.39%)) Exchanged for $ 6 per share at the beginning of 2023. Its share price recently exceeded $ 100 after the stellar profit from the fourth quarter underlined the continuous momentum of the artificial intelligence of the company (AI). As exciting as the journey has been for shareholders, it is always fair to question an action that generates such important yields in such a short time.
Those who follow the company will rightly emphasize the growth of Palantir acceleration income and a huge addressable market. After all, Palantir’s AI software is used for various applications, ranging from military use to supply chains management. However, the company and the stock are not the same, and this can be problematic when they extend too far.
Three fools have evaluated the dynamics between Palantir’s activities and its actions to determine if investors should continue to buy actions at these levels.
Here’s what you need to know.
Could Palantir become a company defining the era? This is a question that investors should take seriously.
Jake Lerch: Palant’s CEO, Alex Karp, said his business is a “software juggernaut”. I think we should Take it to the word.
There are growing signs that Palantant is not only a flash in the pan. Indeed, I think that ther The company could become the rarest things: a company that defines a particular commercial era. Think Microsoft, AppleMeta platforms, And Netflix In the past 20 years.
Certainly, they are high comparisons. But when you take a step back and consider the landscape, Palantant begins to show signs that he can offer a revolution in its own right.
During his last quarter (the three months ended on December 31, 2024), Palantant said that his American income alone had increased by 52% from one year to the next to 558 million dollars. The United States commercial income has increased by an even faster rate by 64%.
In short, American companies simply shove money to palantir For to use of Its platform fed by AI. Or, as Karp says it:
The company we have built has now developed its own momentum and internal strength, its own inner life and its forms of wild organic growth, with the production that we see from afar what we invest.
Like the names of Megacap technology before hethere seems to be Precipitation for organizations to get their hands on the platform powered by Palantant to improve margins, increase customer satisfaction, increase sales or all of the above.
GrantedWe fear that the palantant evaluation is too rich, even with its rapid growth. And, fairly fair, the stock is expensive – for now. Its price / sales ratio of 96 times puts the stock far out of reach for any value investor – and even for most growing investors concerned with value.
However, just like Amazon in the early 2000s, evaluation may not be a useful objective in this case, assuming that the company in question forges a new path that can provide decades of growth.
Although it is still early, I think It becomes easier to see why Palantir could do just that.
Palantir shoots all cylinders, but still sells it
VA Healy:: At first glance, Palantir does not look like a stock to avoid. Indeed, the productivity gains focused on the AI delivered to customers seem to change the situation, which has caused considerable growth in its customers. In addition, its report on the results in the fourth quarter of 2024 was phenomenal, emphasizing increased increase in income and a rapid increase in profits.
Unfortunately, financial gains are only worth so much, and the increases in the palantant stock seemed to exceed this growth of almost all evaluation measures. Investors could reject the P / E ratio dragged by more than 530, because it only gained profit for a relatively short time.
Nevertheless, the P / E term ratio, which is now greater than 200, indicates that the share price has years ahead of its growth despite an increase of 116% of annual net profit compared to the year previous.
However, the company price / value of the 51 company is undoubtedly the most blatant sign of overvaluation. Although the S&P 500The average accounting value of the multiple of 5 is at multi -year summits, it is always a tiny fraction of the location of the Palantir Price / Book ratio.
In addition, its multiple accounting value has caught up NvidiaOne of the most efficient actions in the AI industry. Such a level could involve a short -term limited increase.
Indeed, Palantre has found a successful market niche in the IA software space, and investors should expect its income and profits to increase at a rapid rate in the foreseeable future.
However, this prosperity has probably caused the performance of the performance of the palanting actions of the fundamental principles of the company. Until Palantant experiences a significant decline, investors should consider avoiding this stock.
Put the valuation of Palantir in perspective
Justin Pope: These situations rarely have an obvious answer. Yes, Palantir is expensive by traditional measures, but as Jake has just discussed, history has shown that exceptional companies can challenge conventional wisdom. It is still too early to appeal to Palantant, but the company is on track. Its only flexible software believes itself with an opportunity for AI that certain estimates will create billions of dollars in economic value in the coming years.
But sometimes the stock moves faster than the company, which can cause problems. Currently, the market capitalization of Palantant is around $ 250 billion. The company generated $ 2.87 billion in revenues in 2024. To give a certain perspective to this, Palantant is now a larger company than some of the most important companies in the world, including McDonald’s,, CiscoAnd Adobe::
PLT Return (TTM) data by Ycharts
However, as you can see above, Palantir only makes a fraction of income. These are all different commercial models, but the three are very profitable and have exceptional a history of sustained growth. When you buy palantant today, you mainly tackle palantant to follow the plunge. Perhaps Palantant will continue to grow and eventually earn more income and profits than all these companies. If this is the case, it is always difficult to deny that a large part of the future success of the company is now reflected in action.
There is a good chance that the stock will be more likely to drop than from here, at least in the short term. The evaluations act as gravity, pulling stronger, the more they enter the stratosphere. Investors should consider waiting for a withdrawal to buy the stock, or at least buy slowly to leave money at hand. Stocks that go up so far, as fast, often withdraw hard too.
