Summary
- Palantir remains fundamentally strong with robust Q3 results, but current valuations are stretched, prompting a downgrade to Hold.
- PLTR’s institutional ownership is increasing and short interest is declining, signaling long-term accumulation, but valuation bubbles and volatility are risks.
- Despite strong revenue and operating margin growth, declining cash flow yields and elevated stock-based compensation raise concerns about sustainability.
- I recommend trimming positions after a ~45% rally, as further upside is limited at these valuation levels; maintain a smaller core holding in PLTR.
Willie B. Thomas/DigitalVision via Getty Images
There is still a lot of room for [my bull thesis]…
Summary
- Palantir remains fundamentally strong with robust Q3 results, but current valuations are stretched, prompting a downgrade to Hold.
- PLTR’s institutional ownership is increasing and short interest is declining, signaling long-term accumulation, but valuation bubbles and volatility are risks.
- Despite strong revenue and operating margin growth, declining cash flow yields and elevated stock-based compensation raise concerns about sustainability.
- I recommend trimming positions after a ~45% rally, as further upside is limited at these valuation levels; maintain a smaller core holding in PLTR.
Willie B. Thomas/DigitalVision via Getty Images
There is still a lot of room for my bull thesis on Palantir (PLTR) to run. Execution is stronger than expected and Q3 results show healthy progress - that should continue. However, there are critical changes
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