Palantir Technologies (PLTR) Expands PwC Alliance, Is Fair Value Already Priced In?
Palantir Technologies (PLTR) is back in focus after PwC US outlined an expanded alliance that aims to push Palantir’s AI and data platforms deeper into large corporate workflows and complex transformation projects.
The PwC update lands after a sharp 7.7% 1 day share price gain to US$182.53, capping a 30 day share price return of 12.2% and a 90 day share price return of 34.7%. Palantir Technologies’ 1 year total shareholder return of 16.9% and very large 3 year total shareholder return above 10x point to momentum that has already been strong for longer term holders.
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After a run that has taken Palantir Technologies to US$182.53, the stock still trades only a few percent below both analyst targets and some fair value estimates. Is that a small discount or a warning that caution remains justified?
Most Popular Narrative: 6.7% Overvalued
According to the most followed Palantir Technologies narrative, fair value sits at about $171.06 compared with the current $182.53 share price, which puts that story slightly behind the market price.
Palantir remains an exceptional company with groundbreaking technology and a clear mission. I have high conviction in its long-term potential and believe it could evolve into another Salesforce, Oracle, or SAP. However, even when factoring in flawless execution and strong future growth, the stock appears overvalued following recent price surges.
Want to see what is driving that premium on Palantir Technologies? The narrative focuses on fast compounding revenue, higher profit margins and a rich future earnings multiple.
Result: Fair Value of $171.06 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Palantir Technologies still faces two clear pressure points: any revenue slowdown or weaker margins could quickly challenge this overvaluation narrative.
Find out about the key risks to this Palantir Technologies narrative.
Another View On Palantir Technologies’ Valuation
The user narrative flags Palantir Technologies as overvalued, yet our DCF model points in a different direction. At US$182.53 the stock is 2.7% below an estimated fair value of US$187.62 based on forecast cash flows. That is a narrow margin. Is this a small cushion or just noise in a very optimistic story?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Palantir Technologies for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 52 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
If the mixed signals around Palantir Technologies leave you unsure, consider making a decision while the story is still forming and weigh both sides carefully using 3 key rewards and 1 important warning sign.
Looking for more investment ideas beyond Palantir Technologies?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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