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Financial data on TradingView ↗Reported statements, ratios and ownership, alongside this research.
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Explore the research to see how business evidence informs assumptions and valuation.
Start with the business evidence, then follow the assumptions through to scenarios and valuation.
Financial data on TradingView ↗Reported statements, ratios and ownership, alongside this research.
Valuation and assumptionsPalantir's Q2 2026 revenue grew 93% with 62% adjusted operating margins, but the stock trades at approximately 137x forward earnings and 52x forward revenue. The tension is whether AIP-driven US commercial acceleration (149% YoY) is a durable platform shift or a cyclical surge that will normalize.
Palantir sells software subscriptions across four segments: US Commercial, US Government, International Commercial, and International Government. The Ontology layer connects data, AI models, and workflows, creating high switching costs. Revenue was $4.48bn in FY2025 and is guided to $8.15bn in FY2026.
The market price of $167.23 implies revenue growth of 25-30% annually for a decade with terminal FCF margins of 40-45%. This requires Palantir to transition from hyper-growth to durable compound growth without significant competitive erosion.
A valuation model that works backward from a share price to find combinations of growth, margins, and other assumptions consistent with that price.
In this report: Used to determine what growth and margin assumptions the current share price implies. At $167.23, the market requires approximately $35bn in FCF by 2035, requiring a 29% revenue CAGR for a decade.
Palantir is a high-quality business with genuine competitive advantages, but the valuation leaves no margin of safety. The base case yields intrinsic value of $150-200 per share, implying flat to negative returns from $167.23 over 3-5 years. The risk/reward is unfavourable at current prices.
US commercial revenue growth: at 149% YoY, this is the single largest driver of incremental revenue and valuation. A 20 percentage point change in 2027 growth changes intrinsic value by approximately $55 per share.
Net dollar retention: at 157%, this measures expansion within existing accounts. A 10 percentage point decline changes intrinsic value by approximately $17.50 per share.
Government revenue growth: at 90% US and 42% international, government is 51% of revenue. A 10 percentage point change in growth changes intrinsic value by approximately $12.50 per share.
US commercial growth decelerates gradually to 50% in 2027 and 30% in 2028. Government growth moderates to 25%. FCF margin stabilises near 50%. At 35x FCF, intrinsic value is $150-200 per share.
US commercial revenue growth: monitor quarterly. A reading below 30% for two consecutive quarters would invalidate the growth thesis. Positive direction is above 40%.
Net dollar retention: monitor quarterly. A decline below 120% would indicate weakening expansion within existing accounts.
Competitor product launches from OpenAI or Microsoft that overlap with Palantir's Ontology or workflow capabilities.
AIP-specific revenue is not separately disclosed in SEC filings, making it impossible to independently verify whether AIP growth is net-new or repriced legacy contracts. Segment-level gross margins are not disclosed. Direct market share data for the enterprise AI platform market is not available.
These model scenarios depend on their inputs. Review the assumptions and supporting evidence alongside the implied values.
earnings multiple v2 · as of 2026-10-18
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