Summary:
- An upcoming $120 million SARs expense will likely cause a significant EPS miss, unaccounted for by Wall Street analysts.
- The stock being expensive does not mean that it is overvalued, and investors too fixated on P/S ratios would have missed the remarkable Palantir gains.
- My current fair intrinsic value for the business is $55 per share, implying a -32% downside. However, it is undervalued using market implied discount rates.
- I maintain a hold rating for Palantir, as the business remains robust despite the anticipated negative Q4 catalyst and current overvaluation.
Joe Raedle
Since I first initiated a buy rating for Palantir Technologies (NASDAQ:PLTR), the stock has returned 371% against ~20% of the S&P 500. Typically, my investment approach ignores pricing altogether and does not focus on looking at charts or pricing metrics such
Analyst’s Disclosure: I/we have a beneficial long position in the shares of PLTR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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