Should You Buy Palantir Stock Before This Huge Investor Update? | PLTR Stock Analysis | $PLTR

Summary

Palantir's stock has surged 152% in 2025, leading investors to consider whether they should buy before its upcoming earnings report. The company’s impressive growth, including a 48% year-over-year revenue increase and record contract values, has made it a top pick for AI investors. However, its high market valuation—three times its calculated intrinsic value—raises concerns about potential risks. The speaker advises waiting for earnings results before purchasing, as the stock is priced for perfection, and any disappointments could lead to significant losses.

Takeaways

• 😀 Palanteer stock has risen 152% year-to-date in 2025, positioning it as a strong player in AI services for enterprises.
• 😀 The video discusses whether investors should buy Palanteer stock before its earnings report, with an analysis of key factors to consider.
• 😀 Palanteer’s revenue growth is crucial for its profitability, with a 48% year-over-year increase and a 14% quarterly growth, reaching $1 billion in revenue.
• 😀 Palanteer's business model relies on high profit margins, where increased revenue results in a larger percentage increase in profits due to its software-as-a-service structure.
• 😀 The company is facing limitations in serving more customers with its current employee count, but it plans to hire more people to support growth in 2025.
• 😀 Palanteer signed a record $2.27 billion in total contract value in the most recent quarter, a 140% year-over-year increase, which is expected to fuel future revenue growth.
• 😀 The company’s contract value doesn’t immediately turn into revenue, but is recognized gradually as it performs services over multi-year deals, making forward contract values important for future growth expectations.
• 😀 While Palanteer has a strong relationship with U.S. government clients, it faces challenges in gaining traction with U.S. businesses due to high service costs, though there’s room for expansion into more business sectors.
• 😀 Palanteer’s financials are impressive, with cash flow from operations of $539 million, a 54% CFO-to-sales margin, and no debt, positioning it as a highly profitable company with a pristine balance sheet.
• 😀 Despite strong metrics, Palanteer’s stock is overvalued, with a market price of $190 compared to an intrinsic value of $50, and a price-to-earnings ratio of 256, 10 times higher than the S&P 500 average.
• 😀 The video concludes that while Palanteer is a great company, its stock price is too risky to buy before earnings due to the potential for a significant drop if earnings don’t meet high expectations. A more prudent approach would be to wait for earnings results before purchasing.

Q & A

What is the current performance of Palantir stock in 2025?

Palantir stock has increased by 152% year-to-date in 2025, reflecting investor optimism about the company's role in the growing artificial intelligence sector.

Why are investors considering buying Palantir stock before its earnings report?

Investors are curious if they should buy Palantir stock before its earnings report because of the company's impressive revenue growth, strong profitability, and substantial contract value, which suggest future growth potential.

What key metrics should investors focus on when analyzing Palantir's financial performance?

Investors should focus on Palantir's revenue growth, total contract value, remaining performance obligations, and US commercial deal value, as these indicate future revenue potential. Additionally, its cash flow from operations and strong balance sheet are important metrics to track.

How does Palantir's business model impact its profit margins?

Palantir operates on a Software-as-a-Service (SaaS) business model, where its costs remain relatively flat, allowing the company to expand its profits at a higher rate than its revenue growth. This is because as revenue increases, costs do not scale in the same way, leading to greater profit margins.

What challenges is Palantir facing in expanding its customer base?

Palantir faces challenges in expanding its customer base in the business sector, as many companies lack the budget to afford its services. While government institutions are key customers, Palantir needs to make its services more affordable or demonstrate increased value to attract more business clients.

What is the significance of the total contract value and remaining performance obligations for Palantir investors?

The total contract value and remaining performance obligations are key indicators for Palantir's future revenue growth. They represent future contracted revenue that will be recognized over time, providing insight into the company's revenue outlook for upcoming quarters and years.

What is Palantir's cash flow and how does it compare to other companies?

Palantir's cash flow from operations in the most recent quarter was $539 million, with a 54% cash flow from operations to sales margin. This is considered excellent, ranking among the best of nearly 300 companies the investor follows.

How is Palantir's balance sheet positioned for future growth?

Palantir has a very strong balance sheet with $6 billion in cash and no debt, positioning it well for future growth and the ability to weather potential economic fluctuations or invest in expansion.

What risks are associated with buying Palantir stock before its earnings report?

The risk of buying Palantir stock before its earnings report lies in its high valuation. If the company fails to meet investor expectations, the stock could see a significant decline in value (20-40%). The stock is trading at a premium, making it vulnerable to sharp downward movements if earnings disappoint.

Why does the investor recommend waiting until after the earnings report to buy Palantir stock?

The investor recommends waiting until after the earnings report because Palantir is trading at a high valuation, and there is a significant risk of a downturn if earnings don't meet expectations. Waiting allows investors to assess the financial results first, minimizing downside risk.