Palantir Technologies Inc. (PLTR): what the price requires
At today's price, Palantir Technologies Inc. (PLTR) is priced for today's economics sustained for ~12.1 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-13 · Source: https://boothcheck.com/report/PLTR
Headline
| Field | Value |
|---|---|
| Ticker | PLTR |
| Company | Palantir Technologies Inc. |
| Sector / Industry | Technology |
| Current price | $128.77/sh |
| Composition | Government 54% / Commercial 46% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin today | 33.9% |
| Must persist for | 12.1y |
| Multiple paid | 189x operating income |
Solve inputs: computed at a 14.1% cost of capital; growth searched up to the 50% self-funding ceiling; each 1pp moves the implied horizon ~0.8 years.
Reconcile: at the x-ray's 9.3% required return this reads ~8.4 years; the models below use their own rates.
How unusual the bet is: elevated (limited comparison data)
| Reference | Value |
|---|---|
| sustained it ~10 years at this level | 7% |
| implied end-window share | 1% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 11.19x | 4 | expensive |
| Earnings | 12.05x | 4 | expensive |
| Relative | 6.33x | 5 | expensive |
| Growth | 2.84x | 3 | expensive |
Families that call it expensive: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $45.40 | 2.84x | yes | FCF base $3.0B, growth 25% (input: historical growth), terminal g 4.0%, WACC 9.2%, 7yr projection |
| DCF Exit Multiple | Growth | $135.02 | 0.95x | yes | Exit EV/EBITDA: 161.1x / 163.1x / 165.1x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $58.00 | 2.22x | yes | P/E 68.03x (blended: sector 35x + trailing (TTM) 145x), scenarios: 54.4x / 68.0x / 81.6x (bear / base = sector held flat / bull), EV/EBITDA 55x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $9.59 | 13.43x | yes | BV/sh $3.29, ROE (TTM) 27.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $16.63 | 7.74x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $35.38 | 3.64x | yes | Rev $5.2B, growth 30% (input: historical growth; tapered), Terminal P/S: 9.6x / 12.0x / 14.4x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $10.68 | 12.06x | yes | EPS $0.89, growth 2% (input: historical EPS growth), PEG=72.55 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $2.48 | 51.92x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.43B × (1−1%) / WACC 9.2% → EPV (no growth) (excluded from median) |
| Residual Income | Asset | $14.38 | 8.95x | yes | BV $3.29 + 5yr PV of (ROE (TTM) 27.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $8.11 | 15.88x | yes | √(22.5 × EPS $0.89 × BVPS $3.29) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $20.33 | 6.33x | yes | EBITDA $2.02B × sector EV/EBITDA 25.0x |
| FCF Yield | Earnings | $12.01 | 10.72x | yes | FCF $2688.3M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $8.94 | 14.40x | yes | SBC-adj FCF $1.96B (FCF $2.69B − SBC $0.73B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $28.72 | 4.48x | yes | EPS $0.89 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $3.99 | 32.27x | yes | BV $3.29 × (ROIC 11.2% / WACC 9.2%) (excluded from median) |
| P/Sales Sector | Relative | $16.26 | 7.92x | yes | Revenue $5.22B × sector P/S 8.0x |
| PEG Fair Value | Relative | $33.38 | 3.86x | yes | EPS $0.89 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $9.62 | 13.39x | yes | EPS $0.89 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $8.0b |
| Net debt / NOPAT (after-tax) | -5.11x (net cash) |
| Net debt / operating income (pre-tax) | -5.04x (net cash) |
| Share count CAGR (dilution) | 6.0% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- Palantir is the rare software company where the government business is the anchor, not the ceiling: 55% of revenue comes from government customers per its own filings, and its US commercial business, the newer half, is growing at 133% year over year on AIP demand.
- The biggest specific risk is the price itself: at about 186 times company-wide operating income, the market is paying for growth held at the fastest self-funding pace for roughly twelve years, a persistence only about 7% of comparable fast-growers have delivered over even ten.
- Watch the August 10, 2026 second-quarter report against management's revenue guide of $1.797B to $1.801B, and the full-year US commercial guide of at least $3.224B, which implies 120%-plus growth for the year.
Bull Case
Software companies in hypergrowth are hard to value for a boring reason: the current income statement carries almost no information about the mature state. Palantir breaks the usual pattern in one important way, and it is the reason the bull case exists at this price: it is already profitable while growing this fast. Trailing operating income is $2.0B at a 38.1% operating margin, the balance sheet holds $8.0B of net cash with zero gross debt, and the growth is not decelerating, it is accelerating. The 10-Q discloses commercial revenue up 47% year over year in mid-2025, and by the first quarter of 2026 US commercial revenue was growing 133% year over year with the full-year US commercial guide raised past $3.224B.
The government anchor is what makes the commercial curve credible. The filings describe revenue from US government customers at $373.0 million for the first quarter of 2025, up from $256.7 million a year earlier, and the company notes it takes on hard institutional problems "that others may pass over for lack of resources and shorter investment horizons". Government work at that depth produces two things a commercial software vendor cannot buy: security accreditation that takes competitors years to replicate, and reference deployments in the most demanding environments on earth. The USDA award worth up to $300 million and GE Aerospace's reported 26% engine-performance improvement on AIP are what the flywheel looks like when it turns.
The bet, stated plainly, is that AIP becomes the operating layer for enterprise AI the way databases became the operating layer for records. If US commercial keeps compounding anywhere near its current pace while government renews and expands, today's revenue base roughly doubles every couple of years with incremental margins already proven at 38%. Very few companies have ever offered that combination of growth rate, profitability, and a fortress balance sheet at the same time, and the ones that did rarely looked cheap on the way up.
Bear Case
The moat is being priced as unique precisely when it is becoming less so. Palantir's defensible advantage was never the algorithms; it was the years of accreditation, the forward-deployed engineering model, and the absence of credible rivals for operational AI at institutional scale. Each pillar is eroding at the edges: the hyperscalers now sell AI platforms with enterprise integration teams attached, systems integrators have rebuilt their offerings around foundation models, and defense-tech entrants compete directly for the government programs that once had a field of one. None of this shows up in Palantir's current growth numbers, which are excellent. It shows up in the price of replicating what Palantir sells, which is falling every quarter as the underlying models commoditize.
Now the arithmetic. At $126.75, the market pays about 186 times company-wide operating income. Inverted, that price requires operating growth held at the fastest pace the business can self-fund for roughly twelve years at a 13.9% cost of capital; among comparable fast-growers, only about 7% sustained that for even ten years. No valuation family gets anywhere close: even the forward-growth methods, built to credit compounding, land at about a third of the price, peer multiples at a sixth, and the asset and earnings-power lenses at a tenth. This is not a case where one lens misses optionality that another catches; every frame, including the friendliest, says the same thing. The price is a bet beyond what any standard method supports.
The funding of the growth has a cost the income statement hides in plain sight. The share count has grown about 6% a year over the past four years, stock-based compensation doing quietly what a secondary offering would do loudly, and at today's market capitalization each year of that dilution transfers roughly $20B of value from holders to employees. Concentration cuts the other way: government customers are 55% of revenue per the filings, renewal cycles are political as well as commercial, and the Strategic Commercial Contracts line has already shown revenue can shrink inside a growth story, with the 10-Q noting "a decrease of $4.1 million of revenue from Strategic Commercial Contracts". Nothing about the operating business has to go wrong for the stock to; the growth merely has to be ordinary-exceptional rather than historically unprecedented.
Valuation
The price is the story. At $126.75 (July 10, 2026) and a $325.9B market capitalization, Palantir trades at roughly 186 times its $2.0B of trailing operating income. Run backward, that price embeds operating growth held at the company's self-funding ceiling for about twelve years before fading, computed at a 13.9% cost of capital, and the historical base rate for sustaining such a pace even ten years is about 7% among comparable companies. The margin side needs nothing heroic, the company already operates at 38.1%; the entire bet is that the growth rate refuses to fade for over a decade.
Every family of valuation method sits far below the price, which is itself the signal. The forward-growth methods land at about a third of it, peer multiples at roughly a sixth, and the asset-value and earnings-power lenses at about a eleventh. When even the growth-crediting frames cannot reach a price, the premium is not durability of the demonstrated business; it is a claim about a future business several times the current one. The reader deciding at this price is underwriting the claim, not the trailing numbers.
What the demonstrated business does support is real and unusually clean: a 54/46 government-commercial revenue split per the composition data, US government revenue that grew from $256.7 million to $373.0 million in a year per the 10-Q, commercial growing faster still, 38.1% operating margins, $8.0B of net cash, no debt, and positive cash generation. The offsetting fact is the 6% annual share-count growth, which means per-share value compounds meaningfully slower than the company does. The balance sheet removes any solvency question from the downside; the multiple is the entire risk. If growth persists at guidance pace, the price grows into itself on a multi-year horizon; if growth reverts toward what even optimistic software peers deliver, the distance between the price and every valuation family closes from the top.
Catalysts
The August 10, 2026 second-quarter report is the next dated test. Management guided revenue of $1.797B to $1.801B for the quarter, ahead of consensus near $1.7B, and company-defined adjusted income from operations of $1.063B to $1.067B; the year's headline number is the raised full-year US commercial revenue guide of at least $3.224B, at least 120% growth. With US commercial running at 133% year-over-year growth and 18% sequentially as of the first quarter, the market will read any sequential deceleration as the first data point against the twelve-year persistence the price assumes.
The contract calendar is the second stream: the USDA program worth up to $300 million extends the civilian-agency footprint beyond defense, GE Aerospace's public AIP results give the commercial pipeline a marquee industrial reference, and government budget cycles into the US fiscal year-end (September 30) will show whether defense and civilian AI spending keeps its current priority. Dilution runs quietly alongside: the share count's roughly 6% annual growth is the recurring cost of the compensation model, and any move to rein it in would itself be a catalyst for the per-share math.
Peer Cohorts (Per Segment, With Filing Citations)
Government (reported)
- BAH (BOOZ ALLEN HAMILTON HOLDING CORPORATION)
- (no filing in the citation store)
- CACI (CACI International Inc)
- (no filing in the citation store)
- LDOS (Leidos Holdings, Inc.)
- (no filing in the citation store)
- SAIC (Science Applications International Corporation)
- (no filing in the citation store)
- BBAI (BigBear.ai Holdings, Inc.)
- (no filing in the citation store)
Commercial (reported)
- AI (C3.AI, INC.)
- (no filing in the citation store)
- BBAI (BigBear.ai Holdings, Inc.)
- (no filing in the citation store)
- ESTC (Elastic N.V.)
- (no filing in the citation store)
- SNOW (SNOWFLAKE INC.)
- (no filing in the citation store)
- PATH (UiPath, Inc.)
- (no filing in the citation store)
- NOW (ServiceNow, Inc.)
- (no filing in the citation store)
- PTC (PTC Inc.)
- (no filing in the citation store)
- VEEV (Veeva Systems Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 business update · Barchart earnings preview; Q1 2026 press release · Yahoo Finance / AIP coverage, 2026 · Yahoo Finance AIP coverage, 2026