Parkev Tatevosian, CFA on $PLTR (Nov 4, 2026)

Palantir announced quarterly financial results that exceeded expectations. Management raised its forecasts for the remainder of this year with regard to revenue and net profit.

But there was something that worried me as a Palantir shareholder, and I will share the details with you about it .

I will update my fair value estimate for Palantir after reviewing the quarterly financial results, and I will update my rating of the stock as buy, hold, or sell, all in this relatively short video.

So, Palantir's stock fell by approximately 3% in after-hours trading. Revenues accelerated again, growing by 96% compared to the same quarter last year to reach $2.3 billion , which represents a 20% increase over the previous quarter.

However, there were some concerns about its future growth prospects, as the total value of contracts signed by the company rose by only 6% year-on-year. This was a business that was achieving huge increases in the value of contracts, signing new deals, and outstanding performance obligations.

In fact, the value of the remaining deals for its US business increased by 79% year-over-year , but it rose by only 4% from the previous quarter.

So, these are just a few signs of a business that may be slowing down. We're looking very closely here, because when you have a business that's thriving the way Palantir is, with the revenue growth rates it's achieving, the expanding profit margins, and the cash flow from operations, you're looking for those signs that might indicate a slowdown is about to happen.

These early signs of a slowdown may be worrying to me as a contributor.

Its operating income rose to 1.1 billion, representing an operating profit margin of 47%. This is considered among the very best. Cash flow from operations jumped to 1.2 billion, representing 52% of cash flow from operations to sales, another excellent metric .

The balance sheet continues to improve . Palantir now has more than $10.4 billion in cash on its balance sheet, and earns between 4 and 5% from ultra-secure government bonds or money market accounts.

This means that the company earns approximately $500 million annually just from its cash reserves and profitability. Or rather, from the income of the interest.

Therefore, looking ahead to the fourth quarter, they are forecasting revenues of $2.65 billion and adjusted operating income of $1.642 billion. That would be an increase from 2.4 billion, and adjusted operating income would represent an increase from 1.427 billion, or about an additional $217 million at the midpoint.

I have mentioned some challenges here because Palantir is trading at a very excellent valuation . When you look at a company that trades with an excellent rating, you are looking for perfection in every detail.

For Palantir, the two figures it highlighted earlier – the total value of contracts which rose by only 4% compared to the same quarter last year – are not a sign of a company that should be trading at a very premium price.

But it's about revenue growth, cash flow from operations, and operating profit margins. All these other things are indeed attributes of a company that deserves an excellent rating.

Therefore, Palantir is currently trading at a forward price-to-earnings ratio of 76, which I consider a fair price given its prospects.

In addition, when you look at the company using a discounted cash flow valuation , you have calculated the fair value to be slightly more than $194. I have made some adjustments to the cash flow estimates and valuation schedules, but I have not finished making updates based on the latest quarterly report because I have not yet evaluated the company's earnings call transcript.

After I finish processing that report, I will combine those results with what I have already added here to give my final assessment of the company's fair value after earnings, which I currently calculate at 194.

The current market price was 178 before the earnings announcement, but after-hours trading reduced the price by an additional $5, to trade at 173 compared to the fair value of 194.

When we apply a margin of safety, it appears slightly undervalued using this valuation calculation.

Therefore, I upgraded Palantir stock to a buy opportunity since it crashed to $106 per share earlier this year. At that time I added Palantir stock to my investment portfolio. That's when I made the purchase.

My last rating update was on October 26, when I confirmed my buy recommendation with a relatively low level of confidence because the rating was getting higher.

Today, I will repeat that buy recommendation with a low level of confidence because I feel again that the valuation is getting higher. I see signs of a slowdown, not warning signs, but signs of a slowdown that reduce my enthusiasm for Palantir stock.