Palantir run appears unsustainable as Jefferies cites CEO share selling plan

Palantir (NYSE:PLTR) shares have performed remarkably well in 2024, with shares increasing more than 250% year to date as the Alex Karp-led company has found momentum through its artificial intelligence offerings and customer bootcamps.

However, the analysts at Jefferies note the multiple expansion appears unsustainable. They cite recent share sell-offs by Palantir’s CEO.

“We highlight the increased frequency of insider selling via Rule 10b5-1 trading plans as the stock has rallied,” said Jefferies analysts, led by Brent Thill, in an investor note. “CEO Alex Karp has sold nearly 40M shares of PLTR for an aggregate of more than $1.9B over the last 3 months, and more than 18M shares for an aggregate of more than $1B just over the last 2 weeks. While he has already sold ~20% of his overall stake in PLTR, his current Rule 10b5-1 trading plan allows for another ~9M shares to be sold through May 2025. This could create a further overhang for the shares.”

What’s more, while Palantir’s calendar year 2025 revenue estimates have moved up 11% year to date, its next twelve months revenue multiple has expanded 202% over the same time period and now trades at 43x EV/NTM revenue, Thill noted.

“The last time we saw such high magnitudes of multiple expansion was during the Covid bubble, when many of the high-growth names saw their multiples significantly expand at the same time,” Thill added.

Jefferies assigns Palantir an Underperform rating and gives the stock a price target of only $28.