Palantir’s Partnership With Microsoft Might Sustain Sentiment

Summary:

  • Palantir’s partnership with Microsoft is symbolic of greater integration of Palantir within the Western commercial and government ecosystem. It lays a foundation for future EPS and revenue upward revisions.
  • Despite strong sentiment for Palantir stock that has allowed it to trade at a P/S ratio 2.36 times greater than Snowflake’s, its revenue growth rate estimates are lower.
  • Based on a fundamental analysis approach, Palantir stock cannot be a Buy. Despite this, its developments in big tech integration, commercial segment expansion, and diversification could sustain high investor sentiment.

Robotic playing chess with human

xijian/iStock via Getty Images

In my last coverage of Palantir (NYSE:PLTR), I analyzed its Q2 results, which were definitely historic and showed excellent progress. However, I maintained my Hold rating at the time due to persisting valuation concerns. Some investors have

Company FWD P/S Ratio FWD Revenue Growth Estimate FWD P/E non-GAAP Ratio FWD Diluted EPS Growth Estimate
Palantir 24.8 20.4% 86 92.9%
C3.ai 7.8 20.5% No profit No profit
Snowflake 10.5 28.2% 183 55.3%


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.


Leave a Reply

Your email address will not be published. Required fields are marked *