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The clearest opportunity is that upward annual revenue estimates become reported sales.
FY2027 revenue falls below $10.84 billion, the bottom of the analyst estimate range as of 2026-09-08.
Sell. The report was prepared at $174.33 on 2026-09-04, versus $76.62 Fair value and $99.26 Potential value as of 2026-09-08.3
The report-date price stood above both public valuation points, leaving a 56.05% decline to Fair value.3
The main risk is FY2027 revenue below $10.84 billion. That would require lower later sales assumptions and leave fewer sales over which to spread operating costs.1
The clearest upside is that post-event annual revenue estimates become reported sales. If both operating groups contribute and costs rise more slowly, FY2025 profitability and cash generation could support faster profit and cash growth.15
Industry capital spending equalled 17.8% of revenue, while capital spending was 2.45 times depreciation as of 2026-09-01. That supports an expansion setting for technology investment.
Sell because the report-date price is materially above Fair value and Potential value.3
Industry capital spending equalled 17.8% of revenue, while capital spending was 2.45 times depreciation as of 2026-09-01. That supports an expansion setting for technology investment.
Sell because the report-date price is materially above Fair value and Potential value.3
Despite their differences, Gotham and Foundry both serve as central operating systems for its customers. While they vary in specific functionality, they align in approach. AIP provides an integrated architecture to Gotham and Foundry that can bring AI to every decision. Palantir Technologies Inc. has always prioritized meeting its customers wherever they need us most. Palantir Technologies Inc. originallies built Apollo to enable the continuous delivery of its software wherever its customers are: in the cloud, on-premises, or even more rugged environments.
Today, Apollo enables the rapid, secure delivery of its software and updates across its business, and also enables its customers to securely deploy their own software in virtually any environment. Segment profitability is evaluated based on contribution and contribution margin. Contribution is segment revenue less the related costs of revenue and sales and marketing expenses, excluding stock-based compensation expense.
The central stress combines three breaches: FY2027 revenue falls below $10.84 billion, normalized operating margin stays below 31% for two fiscal years, and annual diluted-share growth exceeds 8% for two fiscal years. Lower sales and margins would reduce profit, while excess dilution would spread that profit across more shares.
No qualifying structural moat source is established. Profit growth and cash generation show execution, but they do not prove switching costs, integration advantages, scale benefits, or another durable barrier.
PANW and CRWD are high-multiple software alternatives, ANET is a profitable growth-infrastructure alternative, and ORCL is a mature lower-multiple option. Their product overlap is not established, so they serve only as valuation and budget comparisons.
FY2025 operating income and free cash flow were strong outcomes, but neither is treated as a moat source.45
None of the valuation methods used to calculate Fair value relies on a separate assumption about how long the competitive advantage lasts.
The highlighted cell is Fair value when every assumption sits at its base level ($76.62). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $2.5B after modeled reinvestment of $13.3M, with terminal value at 62.7% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to , reinvestment, or resets materially.
A beat would strengthen the near-term outlook but would not establish durable growth or remove dilution risk.
Industry capital spending was 17.8% of revenue and 2.45 times depreciation as of 2026-09-01.
Industry capital spending equalled 17.8% of revenue, while capital spending was 2.45 times depreciation as of 2026-09-01. That supports an expansion setting for technology investment.
The cycle view remains demand-led and evidence-limited. If enterprise and government budgets weaken together, both operating groups could slow and fixed costs would absorb more revenue.
No new allocation. The report-date price of $174.33 stands above the $76.62 Fair value and $99.26 Potential value.3
Do not increase exposure solely because estimates rise. Require reported revenue, margin stability, and slower dilution before reconsidering the Sell stance.
The report-date price exceeds both Fair value and Potential value.3
Reduce or exit; strong operating momentum does not offset the valuation gap and dilution risk.5
Wait for reported evidence that both operating groups can sustain the revised path without excess share growth.15
Sell because the report-date price is well above the accepted Fair value and Potential value.3
Upward estimates and strong cash generation support the business outlook, but they do not justify the report-date valuation or remove dilution risk.
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
The records this analysis drew on, as they stood when it was run.
Lower revenue would leave fewer sales to cover fixed costs, while faster share issuance would spread profit across more shares. This path is confirmed if the cited revenue, margin, or dilution conditions occur.
FY2027 revenue below $10.84 billion would break the final explicit annual estimate and force lower later sales, earnings, and cash assumptions.1
Normalized operating margin below 31% for two consecutive fiscal years would show that expenses are absorbing growth rather than creating greater profit.5
Annual diluted-share growth above 8% for two consecutive fiscal years would cause business gains to translate into materially weaker earnings per share.5
A cost of equity above 11.4776% would reduce the present worth of distant earnings even if operating forecasts remain unchanged.2
A terminal P/E below 31.88 times would mean investors pay less for each dollar of mature earnings, reducing long-term value.
The five developments that would weaken our investment case.
A breach would force the revenue assumptions used for later years to reset, lowering projected sales, fixed-cost absorption, earnings, and cash generation.
Current:$12.18 billion mean estimate for FY2027, as of 2026-09-08.
Alert ifBelow $10.84 billion for FY2027, assessed within 18 months.
Persistent margin weakness would mean revenue growth is not producing expected operating leverage. Lower operating profit would then reduce projected earnings and cash flow.
Current:Approximately 31.6% for FY2025, based on reported operating income and revenue.
Alert ifBelow 31% for two consecutive fiscal years.
Excess share issuance would divide company earnings among more shares, reducing earnings per share even if enterprise revenue grows and weakening value captured by existing holders.
Current:Diluted average shares rose from 2.298 billion in FY2023 to 2.565 billion in FY2025.
Alert ifAbove 8% annually for two consecutive fiscal years.
A higher required return would reduce the present value of distant earnings and cash flow, even if reported operations stay unchanged.
Current:10.7958% moderate case as of 2026-09-08.
Alert ifAbove 11.4776% within 12 months.
If investors pay less for each dollar of mature earnings, the value assigned to later profits would fall materially for shareholders.
Current:31.88 times terminal assumption as of 2026-09-08.
Alert ifBelow 31.88 times as growth matures within 60 months.
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
Project SBC-adjusted EPS, discount each year's earnings at cost of equity, then add a Gordon-growth terminal value.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and at , then adjust for signed per current share.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
Solve for the growth rate that makes the model value equal the report-date share price.
Confirmation requires the FY2026 and FY2027 analyst revenue forecasts to be met. This path weakens if reported revenue misses those forecasts or operating profit fails to rise as sales grow through FY2027.1
This path requires the post-event FY2027 revenue revision to become reported sales and the Bull earnings path to hold through FY2030. It weakens if the FY2027 revenue estimate is not met.1
Meeting estimates would preserve the explicit outlook without resolving the long-duration valuation gap.
A miss would put the FY2027 revenue and EPS expectations at risk. Lower sales would weaken fixed-cost absorption, while faster share growth would reduce earnings per share.
In FY2025, Palantir reported positive operating cash flow and positive free cash flow.45
Faster Commercial growth must carry the forecast's mix shift.6
Government weakness would make the outlook overly dependent on Commercial.6
Margin stability shows whether sales growth is creating more profit.5
More shares weaken earnings captured by each existing shareholder.5
| $1.54B |
| $1.91B |
| $2.23B |
| $2.87B |
| $4.48B |
| +30.5% |
| Gross profit | $1.20B | $1.50B | $1.79B | $2.30B | $3.69B | +32.3% |
| Operating income | $-411.0M | $-161.2M | $120.0M | $310.4M | $1.41B | — |
| Net income | $-520.4M | $-373.7M | $209.8M | $462.2M | $1.63B | — |
| EPS (diluted) | $-0.27 | $-0.18 | $0.09 | $0.19 | $0.63 | — |
| EBITDA | $-470.0M | $-334.4M | $273.9M | $520.8M | $1.68B | — |
| R&D | $387.5M | $359.7M | $404.6M | $507.9M | $557.7M | +9.5% |
| SG&A | $611.5M | $596.3M | $524.3M | $593.5M | $657.7M | +1.8% |
FY2025 operating cash flow was $2.13 billion and free cash flow was $2.10 billion. Capital expenditure was $33.88 million, supporting internal funding and strong conversion of operations into cash.45
Low physical capital needs support cash generation, but equity compensation remains the main allocation concern. Reducing stock-based compensation and diluted-share growth would improve shareholder capture.
FY2025 operating income and cash flow show stronger operating economics, but those outcomes alone do not establish a comparable multi-year return-on-capital trend.
The report uses a 10.793% WACC as of 2026-09-08. It does not present the operating outcomes as a measured return-on-capital spread.
Operating income was $1.41 billion on $4.48 billion of FY2025 revenue.
If sales continue to outpace operating costs, earnings could grow faster.
FY2025 stock-based compensation was $684.03 million, while diluted average shares had risen since FY2023.
Enterprise growth may not translate proportionally into earnings and value per share.
| Revenue | $4,475,446,000 |
|---|---|
| Cost of revenue | $789,177,000 |
| Gross profit | $3,686,269,000 |
| Operating expenses | $2,272,254,000 |
| Operating income | $1,414,015,000 |
| Non-operating items and tax | $211,018,000 |
| Net income | $1,625,033,000 |
| Total assets | $8,900,392,000 |
|---|---|
| Cash | $1,423,796,000 |
| Current assets | $8,358,174,000 |
| Total liabilities | $1,412,381,000 |
| Current liabilities | $1,175,581,000 |
| Shareholders’ equity | $7,488,011,000 |
| Net income | $1,625,033,000 |
|---|---|
| Operating inflow | $2,335,211,000 |
| Depreciation and amortization | $26,145,000 |
| Stock-based compensation | $684,033,000 |
| Operating cash flow | $2,134,473,000 |
| Operating outflow | $200,738,000 |
| Cash available | $4,261,886,000 |
| Beginning cash | $2,119,936,000 |
| Exchange-rate effect | $7,477,000 |
| Investing outflow | $2,783,551,000 |
| Capex | $33,882,000 |
| Other investing activities | $2,749,669,000 |
| Financing outflow | $26,910,000 |
| Ending cash | $1,451,425,000 |
| Investing cash flow | -$2,783,551,000 |
| Financing cash flow | -$26,910,000 |
Source: SEC EDGAR · Filed 2026-02-17 · SEC EDGAR
| Revenue by operating segment | Revenue | Share | YoY |
|---|---|---|---|
| Government Operating | $2.4B | 53.7% | 53.1% |
| Commercial | $2.1B | 46.3% | 60% |
Point-in-time financial data used in the 2026-09-08 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017-12-31 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | $1.3B | $1.3B | — | — | — | — | — |
| 2018-12-31 | $595.4M | -$553.6M | -$580M | -$39M | -$52M | $13M | $13.9M | $248.5M | $7.7M | $12.7M | — | -$6.8M | $46.2M | $1.3B | $1.3B | $1.1B | — | -104.7% | — | — | — |
| 2019-12-31 | $742.6M | -$552M | -$579.6M | -$165.2M | -$178.3M | $13.1M | $12.3M | $242M | $11.2M | $36.8M | — | -$22M | $324.5M | $1.3B | $1.4B | $1.1B | $396.1M | -77.6% | — | — | — |
| 2020-12-31 | $1.1B | -$1.2B | -$1.2B | -$296.6M | -$308.8M | $12.2M | $13.9M | $1.3B | $3.8M | $498.2M | — | -$14.9M | $1B | $1.4B | $2.1B | $2B | $456.9M | -107.4% | — | 6.9% | — |
| 2021-12-31 | $1.5B | -$470M | -$520.4M | $333.9M | $321.2M | $12.6M | $14.9M | $778.2M | $0 | — | -$200M | -$397.9M | $306.7M | $2.1B | $2.4B | $2.5B | $260.1M | -26.7% | — | 7.5% | — |
| 2022-12-31 | $1.9B | -$334.4M | -$373.7M | $223.7M | $183.7M | $40M | $22.5M | $564.8M | $0 | — | $0 | -$45.4M | $86M | $2.4B | $2.6B | $2.6B | $249.4M | -8.5% | — | 13.8% | — |
| 2023-12-31 | $2.2B | $273.9M | $209.8M | $712.2M | $697.1M | $15.1M | $33.4M | $475.9M | $0 | — | $0 | -$2.7B | $218.8M | $2.6B | $850.1M | $3.7B | $229.4M | 5.4% | — | 14.0% | — |
| 2024-12-31 | $2.9B | $520.8M | $462.2M | $1.2B | $1.1B | $12.6M | $31.6M | $691.6M | $64.2M | — | — | -$340.7M | $463.4M | $850.1M | $2.1B | $5.2B | $239.2M | 10.8% | — | 14.4% | — |
| 2025-12-31 | $4.5B | $1.7B | $1.6B | $2.1B | $2.1B | $33.9M | $26.1M | $684M | $75M | — | — | -$2.8B | -$26.9M | $2.1B | $1.5B | $7.2B | $229.3M | 31.6% | — | 12.1% | — |
Palantir Technologies Inc. (PLTR) trades at 81.3x forward earnings against a peer median of 52.8x. Its EV/EBITDA of 153.9x compares with a peer median of 49.8x. The comparison uses 4 peers: Palo Alto Networks Inc., Arista Networks Inc., CrowdStrike Holdings Inc. and Oracle Corporation, as of 2026-09-05 to 2026-09-07.
| Note |
|---|
| Commercial software adoption | positive | Faster Commercial growth would broaden revenue and improve fixed-cost absorption. |
| Government technology demand | positive | Government Operating provides a large starting revenue base, reducing reliance on Commercial alone. |
Government Operating contributed $2.40 billion and Commercial $2.07 billion in FY2025. The outlook assumes both groups contribute; a government slowdown would increase the Commercial growth needed to reach the FY2027 revenue estimate.16
| Why |
|---|
| At or above $76.62 Fair value | Avoid initiating exposure. | The valuation does not provide a supported entry margin, even if estimate revisions remain positive. |
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Limitation: Terminal value is 62.7% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Value each distinct segment, subtract corporate overhead and net debt, add probability-weighted optionality, and divide by diluted shares.
| 83.0% |
| 48.7% |
| 42.7% |
| 36.7% |
| 30.7% |
| 24.7% |
| 18.7% |
| 12.7% |
| 6.7% |
| 3.5% |
| Operating margin | 31.0% | 32.1% | 33.2% | 34.2% | 35.2% | 36.3% | 37.3% | 38.3% | 39.4% | 40.4% |
| Operating income | $2.54B | $3.91B | $5.76B | $8.12B | $10.93B | $14.04B | $17.15B | $19.86B | $21.76B | $23.10B |
| Tax rate | 2.7% | 2.7% | 2.7% | 2.7% | 2.7% | 2.7% | 2.7% | 2.7% | 2.7% | 2.7% |
| NOPAT | $2.47B | $3.80B | $5.61B | $7.90B | $10.64B | $13.67B | $16.69B | $19.33B | $21.18B | $22.48B |
| Reinvestment | $13.34M | $19.64M | $27.66M | $37.17M | $47.63M | $473.87M | $1.08B | $1.84B | $2.65B | $3.50B |
| Reinvestment rate (of NOPAT) | 0.5% | 0.5% | 0.5% | 0.5% | 0.4% | 3.5% | 6.5% | 9.5% | 12.5% | 15.6% |
| Depreciation and amortization | $47.84M | $71.13M | $101.50M | $138.73M | $181.34M | $226.19M | $268.55M | $302.71M | $323.01M | $334.34M |
| Free cash flow to firm | $2.46B | $3.78B | $5.58B | $7.87B | $10.60B | $13.19B | $15.61B | $17.49B | $18.52B | $18.99B |
| Government Operating revenue | $4.40B | $6.54B | $9.33B | $12.75B | $16.66B | $20.78B | $24.68B | $27.82B | $29.68B | $30.72B |
| Commercial revenue | $3.79B | $5.64B | $8.05B | $11.00B | $14.38B | $17.93B | $21.29B | $24.00B | $25.61B | $26.51B |
| Terminal growth | 3.5% | 3.5% | 3.5% | 3.5% | 3.5% | 3.5% | 3.5% | 3.5% | 3.5% | 3.5% |
| ANET |
| Arista Networks Inc. |
| 37.6x |
| 23.2x |
| 49.8x |
| 31.5% |
| 45.4% |
| CRWD | CrowdStrike Holdings Inc. | 132.9x | 40.4x | 1.5% | -2.3% |
| ORCL | Oracle Corporation | 14.5x | 6.8x | 19.6x | 53.4% | 36.2% |
