‘Not worth gambling prior to earnings,’ Jefferies says of Palantir stock

Palantir (Nasdaq: Pltr? Shares have increased by a ginormous 393% in the past year, making it one of the market’s biggest winners. Although it is true that its AIP (AI platform) offers the company well positioned in the AI ​​game, it is safe to say that lots of hype has played its role in running the winnings as well.

With Big Data Company scheduled to release its Q4 results on Monday (February 3), this is a point picked up by Jefferies analyst Brent Thill, who highlights what has become an outrageous valuation.

“On 50x NTM Rev, PLTR is the most expensive software name and> 2x the next highest peer,” said 5-star analyst. “The 4Q setup will be challenging as PLTR is to blow up light Comps and any signs of non-accelerating growth can lead to further more compression.”

Thill believes that Palantir benefited from lighter year-over-year-comps, which started in 3Q23, along with growing momentum from AIP, which helped create faster growth through 3Q24. From 4th quarter % (up from 17 %). Given these higher benchmarks, it will be much more difficult for Palantir to maintain or speed up its growth.

Meanwhile, Palantir’s EV/NTM (Enterprise Value-to-Next-12-Months) revenue multiple is compressed by 5% this year and falls from 52x to 50x, after experiencing an extension of a massive 282% in 2024. The last time this A kind of extreme growth in valuation multipling took place was under that covid bubble, as companies with high growth such as snowflake, crowdstrike and data train saw their valuation wave. “However, Thill continues to add,” we are now in a more normalized macro environment, and we believe that any negative factors (decelerating growth, changing interest rates, AI -hype -turns, insider -sales, etc.) can cause, can cause, can cause, to PLTR’s multiple further compressed. ”

According to Thill’s calculations, although Palantir manages to speed up his growth to 50% annually, it would still be necessary to trade with a 13.5x EV/Revenue Multiple in 2028 just to maintain his current share price. This would make it one of the most expensive software stocks, even four years from now. To achieve only an increase of 20% share price, Palantir would have to trade with a 16x multiple.

Basic items can “remain robust” but with valuation completely out of the hill, Thill Rates PLTR shares an underprest form (ie sell) along with a price target of $ 28. The number represents a possible disadvantage of 65% over the next 12 months . (Click here to see Thill’s Track Record)

Thill, together with 5 other analysts in the bear camp and with another 9 possessions and 2 buyer, are claiming the PLTR share a team consensus assessment. It may as well be a sale, however, given the average of $ 51.50 average price targets mean that shares will withdraw by ~ 38% in the coming months. (See Palantir Stock Prognosis?

To find great ideas for shares that deal with attractive valuations, visit TIRPRANKS ‘best shares to buy, a tool that unites all tipranks’ equity insights.

Disclaimer: The statements expressed in this article are solely as the highlighted analyst. The content is intended only to be used for information purposes. It is very important to perform your own analysis before making any investment.