Shares of Palantir Technologies (PLTR) surged about 11% premarket on Tuesday after fourth quarter results and outlook exceeded expectations, drawing positive reactions from analysts.
“Palantir Technologies Inc. (PLTR) reported strong earnings results on Monday evening, easily beating estimates and showing accelerating business growth. The market reacted very positively to that, sending PLTR’s shares higher. While shares have pulled back from the highs seen last summer, Palantir Technologies still is a pretty expensive stock — which is why it’s not a must-own, despite its strong growth,” said Seeking Alpha analyst Jonathan Weber.
Weber noted that looking at Palantir’s fourth quarter report, there are many things to like, with almost every metric moving in the right direction, but added that Palantir’s “valuation remains pretty high.” The analyst noted that the company trades at roughly 50 times its sales and 90 times its operating profit today.
“Depending on your risk tolerance and goals, I thus think that Palantir can either be considered a Hold or a Buy today — it definitely looks better than last summer,” Weber added.
“To me, the most striking element of Palantir’s Q4 update was its initial guidance calling for >60% revenue growth in FY26 (while the Street had expected deceleration to ~40%). The company is also forecasting at least 115% growth in the U.S. commercial business. This should help to appease investors who are laser focused and worried on Palantir’s valuation multiples,” said Seeking Alpha analyst Gary Alexander.
The analyst noted that Palantir is expensive, “but it’s also in the very early stages of commercial monetization with <600 U.S. enterprise customers – indicating a long runway ahead. It’s also difficult to argue with Palantir’s efficiency, at a “Rule of 40” score of 127 in Q4 and forecasting >55% FCF margins for FY26.”
Seeking Alpha analyst Ahan Vashi from The Quantamental Investor said Palantir delivered robust fourth quarter results, with 70% year-over-year revenue growth and strong operating leverage.
However, the analysts noted that despite the company’s management issuing above-consensus sales and profitability guidance for 2026, Palantir’s fair value estimate of $95.46 signals about 40% downside from current levels.
“Despite building a forward-looking model based on aggressive long-term growth and margin assumptions, TQI’s fair value estimate for PLTR stock of $95.46 per share [$245B in market cap] indicates near-term downside risk of ~40%. Hence, Palantir remains overvalued,” said Vashi.
Vashi upgraded his rating on Palantir’s stock to a tactical Sell from a Strong Sell. The analyst rated Palantir stock a tactical Sell in the mid-$100s. However, Vashi noted that “This is not a “short” call by any means – Palantir is an incredible business that I would buy if the market pricing wasn’t “bubblicious” like it is right now.”