Palantir Technologies Inc (NASDAQ:PLTR) is trading lower on Tuesday as selling pressure and weaker momentum indicators weighed on investor sentiment. Valued at $412 billion, Palantir’s market cap has soared despite generating only $1.7 billion in free cash flow, making it appear as though it has “invented time travel” in the eyes of some analysts here.
Over the past year, Palantir has surged 435%, although it has experienced a 14.6% drop in the past month, currently trading around $174. While the stock is not far from its 52-week high of $189.46, analysts from Citron Research argue that its valuation is significantly inflated, proposing that a comparison to OpenAI’s recent $500 billion valuation could suggest a more realistic price of approximately $40 per share for Palantir for the stock.
Valuation multiples are enough to make any fundamentalist gasp. Its trailing P/E sits at a jaw-dropping 580, the forward P/E at 278, and its EV/EBITDA clocks in at 681, with a price-to-sales ratio of 128. By almost any traditional metric, PLTR is priced like it invented time travel — or at least the software that predicts it.
It’s no wonder Citron Research sounded a cautious note in a report titled, “OpenAI at $500B Puts Palantir at $40 — And That’s Generous.” The report highlights that while Palantir has enjoyed substantial market enthusiasm, its revenue growth remains modest compared to competitors like OpenAI, which boasts a scalable subscription model compared to Palantir’s reliance on less predictable government contracts.
Investors looking for a cautionary tale need look no further than Palantir. The combination of eye-popping valuation multiples, modest cash flow, and unrelenting hype paints a picture that is part financial enigma, part Silicon Valley fairy tale. Whether this time-traveling stock will land softly or crash back to reality remains to be seen — but for now, it’s one of the most talked-about and most debated names on Wall Street.
PLTR Price Action: At the time of writing, Palantir shares are trading 5.66% lower at $164.10, according to data from Benzinga Pro.
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