Dear Palantir Stock Fans, Mark Your Calendars for June 30
Palantir Shares (PLTR) have rallied more than 50% over the last three months and touched a new all-time high of $134.48 today, June 2. However, as the firm enters the large-cap universe, new turbulence is likely to ensue.
Trivariate Research has marked Palantir as an 'extreme outlier' in value, one of the most pricey stocks the firm has covered in 25 years. With S&P Global index rebalancing planned for June 30, institutional investors can now take advantage of the window to cut their exposure, which can lead to rotational flows out of the name.
This comes against the background of general market instability, with the S&P 500 Index ($SPX) and the Dow Jones Index ($DOWI) falling by 0.6% last Wednesday despite PLTR moving slightly upward. With valuation indicators flashing warning signs and comparative historical indicators calling for restraint, Palantir's premium status can be expected to come under its first major test.
Regarding Palantir Stock
Palantir Technologies (PLTR) is an enterprise software firm that is focused on AI-driven data integration and decision platforms for government and commercial clients. With a market capitalization close to $311 billion, it is firmly placed in the large-cap space.
The company stock has gained a whopping 510% over the last 52 weeks. That is way more than the overall S&P 500 Index, which rose around 12% over the same period. Palantir stock is up by 7.3% in the last five days alone.
No matter how good price momentum is, there are still valuation measures indicating overexuberance. Palantir has an astronomical forward price-earnings multiple of 330.6x as well as an over 100x price-sales multiple. That is well above software historical averages and indicates ongoing 40% revenue growth every year for ten consecutive years, something which no peer has ever come close to doing on Palantir's current size, notes Trivariate Research.
Palantir Beats on Earnings and Raises Guidance
Palantir delivered a strong Q1 2025 earnings report, with revenue of $884 million, up 39% year-over-year and 7% quarter-over-quarter, exceeding expectations. U.S. revenue surged 55% YoY to $628 million, with U.S. commercial revenue expanding 71% YoY to $255 million, surpassing a $1 billion annual run rate. The company posted adjusted EPS of $0.13 versus $0.08 GAAP EPS, supported by a 44% adjusted operating margin and adjusted free cash flow of $370 million, or a 42% margin. GAAP net income rose to $214 million, a 24% margin.
Key operational metrics further confirmed momentum. Palantir closed 139 deals over $1 million, including 31 above $10 million. It also booked $810 million in U.S. commercial total contract value, up 183% year-over-year, and reported a U.S. commercial remaining deal value of $2.32 billion, up 127% YoY.
Looking ahead, Palantir raised full-year revenue guidance to a range of $3.89 billion to $3.902 billion, representing 36% growth, with adjusted income from operations expected between $1.711 billion and $1.723 billion. The company also boosted its adjusted free cash flow outlook to $1.6 billion to $1.8 billion and guided Q2 revenue to $934 billion and $938 million. Management reiterated expectations for GAAP profitability in every quarter of 2025.
What Analysts Foresee for Palantir Stock
Sentiment among analysts is still mixed. Palantir has a current 'Hold' consensus, but most companies are hesitant based on price. Palantir has an average price target of $93, which represents downside potential of about 30%. The substantial price target spread indicates increasing concern regarding high multiples, particularly against the background of market rotation or macroeconomic-driven correction.
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