Value
3.1/10data confidence 67%| Component | Sub-score |
|---|---|
| P/E | 0.0 |
| Fwd P/E | 1.8 |
| PEG | 4.7 |
| Analyst target | 9.0 |
- ▸Forward P/E: 61.7x
- ▸PEG: 1.81
PLTR · Why this verdict
Why Palantir Technologies (PLTR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score6.5/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Palantir is growing revenue at 85% year-over-year — the highest growth rate in this analysis batch — scoring 10/10 on the growth dimension and ranking 9.7/10 in the peer growth comparison, driven by U.S. commercial and government contract expansions. Growth breakdown | Revenue growth remains above 50% year-over-year for the next 2 quarterly reports as commercial AI platform adoption continues. | →Stable |
| CounterRevenue concentration with government segment at 54% of revenue creates vulnerability — federal budget cuts or contract non-renewals would disproportionately impact the revenue base, and 85% growth may represent a post-pandemic normalization spike rather than a durable rate. | ||
Palantir's quality score of 8.8/10 reflects a Rule of 40 score of 118 (elite tier), 44% operating margins, 33% ROE, and a wide economic moat rating, placing it in the top decile of the entire software peer universe by multiple quality dimensions simultaneously. Quality breakdown | Operating margins remain above 35% and ROE stays above 25% for the next 4 quarters, sustaining the top-tier quality ranking. | →Stable |
| CounterElite quality metrics can be sustained only if revenue growth continues to absorb fixed costs; a deceleration from 85% growth would pressure operating leverage and compress margins rapidly given the high R&D and employee cost base. | ||
Palantir has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 16.9%, with actual EPS consistently exceeding estimates across May 2026 ($0.33 vs $0.28), February 2026 ($0.25 vs $0.23), November 2025 ($0.21 vs $0.17), and August 2025 ($0.16 vs $0.14). Earnings | The company beats earnings estimates in the next quarterly report due in approximately 48 days with at least a 10% positive surprise. | →Stable |
| CounterEarnings beats at Palantir are partially driven by pre-scheduled selling plans (Rule 10b5-1) that reduce reported compensation costs as stock-based compensation is settled — if stock price declines persist, this dynamic may reverse. | ||
At a forward P/E of 64.8x in a confirmed downtrend (200-day moving average declining at -2.4% per month), Palantir carries substantial valuation risk; the stock needs both technical recovery and continued earnings outperformance to justify the current multiple, and an elevated put/call ratio of 1.93 signals options market hedging. Valuation breakdown | The stock reclaims its 200-day moving average within 6 months and analysts maintain price targets above $150, sustaining the positive fundamental case. | →Stable |
| CounterHigh-quality software businesses with 85% growth frequently sustain premium multiples for extended periods, and the confirmed downtrend in a 64x P/E stock may simply reflect broader market multiple compression rather than company-specific deterioration. | ||
Palantir is growing revenue at 85% year-over-year — the highest growth rate in this analysis batch — scoring 10/10 on the growth dimension and ranking 9.7/10 in the peer growth comparison, driven by U.S. commercial and government contract expansions.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 50% year-over-year for the next 2 quarterly reports as commercial AI platform adoption continues.
CounterRevenue concentration with government segment at 54% of revenue creates vulnerability — federal budget cuts or contract non-renewals would disproportionately impact the revenue base, and 85% growth may represent a post-pandemic normalization spike rather than a durable rate.
Palantir's quality score of 8.8/10 reflects a Rule of 40 score of 118 (elite tier), 44% operating margins, 33% ROE, and a wide economic moat rating, placing it in the top decile of the entire software peer universe by multiple quality dimensions simultaneously.
→StableQuality breakdown
- Expectation
- Operating margins remain above 35% and ROE stays above 25% for the next 4 quarters, sustaining the top-tier quality ranking.
CounterElite quality metrics can be sustained only if revenue growth continues to absorb fixed costs; a deceleration from 85% growth would pressure operating leverage and compress margins rapidly given the high R&D and employee cost base.
Palantir has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 16.9%, with actual EPS consistently exceeding estimates across May 2026 ($0.33 vs $0.28), February 2026 ($0.25 vs $0.23), November 2025 ($0.21 vs $0.17), and August 2025 ($0.16 vs $0.14).
→StableEarnings
- Expectation
- The company beats earnings estimates in the next quarterly report due in approximately 48 days with at least a 10% positive surprise.
CounterEarnings beats at Palantir are partially driven by pre-scheduled selling plans (Rule 10b5-1) that reduce reported compensation costs as stock-based compensation is settled — if stock price declines persist, this dynamic may reverse.
At a forward P/E of 64.8x in a confirmed downtrend (200-day moving average declining at -2.4% per month), Palantir carries substantial valuation risk; the stock needs both technical recovery and continued earnings outperformance to justify the current multiple, and an elevated put/call ratio of 1.93 signals options market hedging.
→StableValuation breakdown
- Expectation
- The stock reclaims its 200-day moving average within 6 months and analysts maintain price targets above $150, sustaining the positive fundamental case.
CounterHigh-quality software businesses with 85% growth frequently sustain premium multiples for extended periods, and the confirmed downtrend in a 64x P/E stock may simply reflect broader market multiple compression rather than company-specific deterioration.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Palantir Technologies is an elite software business with a Rule of 40 score of 118, 85% revenue growth, a perfect 4-for-4 earnings beat streak, and superior peer-group quality ranking — but the stock trades at a forward P/E of 64.8x with negative price momentum and a confirmed technical downtrend that must resolve before the fundamental case can be expressed.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
8.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 9.8 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 6.1 |
| FCF quality | 5.8 |
| Moat | 7.5 |
| Rule of 40 | 9.5 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 33%
- ▸Strong margins: 44%
- ▸Earnings quality warning: 77% FCF/NI
- ▸Wide economic moat
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 85% YoY
Momentum
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 5.9 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -3.2%/30d — confirmed downtrend
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.4 |
| Analyst rating | 7.5 |
| Price target | 9.2 |
- ▸Analyst upside: 41%
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Modest insider selling — $132,708,587 (0.043% of mkt cap)
Peer rank
6.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.5 |
| quality rank | 9.0 |
| growth rank | 9.4 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.1 |
| support resistance | 4.3 |
| 52w position | 2.5 |
| gap | 5.0 |
Risk (lower is worse)
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.2 |
| days to cover | 8.9 |
| volatility | 0.0 |
| put call | 2.3 |
| implied vol | 3.1 |
| beta | 5.0 |
| debt equity | 2.5 |
| news risk | 5.0 |
- ▸Elevated put/call: 1.66
- ▸High IV: 61%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (9)
- MOMENTUM:6.9>=5.5
- ASYMMETRY:1.8>=1.5
- INSIDER:OK
- DEATH_CROSS:QUALITY_MOMENTUM_EXEMPT
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:31d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- DEATH_CROSS:quality=8.8>=7.5+momentum=6.9>=5.0 exempted
Reward-to-Risk
1.81
Upside
+27.2%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 48
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.51>1.3
Investment implication
The F-path SELL output reflects an overall score of 5.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 10.0) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 1.81 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 10.0, Quality at 8.8, and Catalyst at 7.6; the weakest are Value at 3.1, Insider at 3.9, and Technical at 4.0. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 1.81 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Elite Software Quality
Trip ifOperating margin falls below 25% for 2 consecutive quarters.
- P2Revenue Growth Trajectory
Trip ifRevenue growth falls below 35% year-over-year for 2 consecutive quarters.
- P3Perfect Earnings Beat Streak
Trip ifEarnings miss consensus estimates by more than 10% in any single quarter, breaking the consecutive beat streak.
- P4Valuation And Downtrend Risk
Trip ifStock price drops below $110, exceeding an 18% decline from current levels of $134, confirming multiple compression is accelerating.