Palantir stock price continues to fire on all cylinders as it surged to a record high of $112, bringing its 12-month gains to near 1,200%. PLTR has become one of the best-performing companies in Wall Street, which has propelled its market cap to over $255 billion.
PLTR strong earnings
Palantir’s surge accelerated after the company published the recent financial results earlier this week. These numbers revealed that its revenue jumped by 36% in the fourth quarter to over $828 million.
The US commercial business, which made $214 million, drove most of this growth. Its government revenue jumped 45% to $343 million.
The company continues to close deals as companies use its data analysis and artificial intelligence solution, AIP. That explains why the number of customer count rose by 43% on a YoY basis.
Palantir had its best annual year ever, with revenue jumping 38% to $1.9 billion. Commercial revenue rose 54% to $702 billion, while total revenue soared to $2.87 billion.
These numbers mean that Palantir is still seeing robust growth across all its business, a trend that may continue this year. Analysts anticipate that Palantir’s revenue will grow by 32% this year to over $3.78 billion.
Palantir will then make $4.70 billion in 2026, a 23.6% annual growth. That is a sign that its revenue growth will start slowing.
Palantir valuation concerns remain
Therefore, there is a big concern about Palantir’s valuation now that the market cap has jumped to over $255 billion. That valuation means that investors are valuing it at 67 times its forward sales for this year. If you were to take Palantir private, it would take you 67 years to recoup your funds, assuming that growth stalls. In contrast, NVIDIA, another popular AI company, has a forward price-to-sales ratio of 23.
Palantir trades at a forward price-to-sales multiple of 330, meaning that it would take you 330 years to break even. In contrast, NVIDIA has a forward P/E ratio of 44, while Microsoft has a multiple of 33.3.
It is hard to justify Palantir’s valuation because analysts anticipate that its growth will slow in the next few years. Assuming that the company grows by 20% each year until 2030, it means that its annual revenue will get to $9.40 billion, so, let us round it up to $10 billion. That would also mean that the firm is also highly overvalued.
Wyckoff Theory and the Palantir stock
PLTR stock by TradingView
So, is it safe to buy to buy Palantir? The Wyckoff Theory is one of the best approaches to chart analysis. The chart above shows that the stock remained in an accumulation phase between 2021 and 2023. It has now moved to the markup phase, which is then followed by the markdown phase, which is characterized by a deep sell-off.
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