Palantir Shares Drop 4% Following Analyst Downgrade

Palantir Technologies shares fell 4% due to bearish coverage from Jeffries. With a price target of $60 per share, analysts predict a potential downside. Investors should be cautious amid a high valuation reliance on growth.

Date: 19-03-2025

AI Rating: 4

Palantir's share price decline was influenced by bearish coverage reported by Jeffries, where the lead analyst maintained an underperform rating with a one-year price target of $60 per share. Given the current closing price of $83.89, this suggests a potential downside of 28.5% for investors.

Palantir's stock is noted to be highly growth-dependent, trading at an astonishing 150 times this year's expected earnings and 52 times expected sales. This rapid valuation setup implies that significant sales and earnings growth is already anticipated and priced into the stock. If the company fails to deliver on these high expectations, we could see an additional pullback in stock prices.

Valuation Concerns

The analyst's commentary on Palantir's valuation profile raises red flags, underscoring possible risks for investors unless they maintain a high risk tolerance. Despite affirmations about Palantir's leadership in AI software, the high valuation may deter some long-term investors.

If the macroeconomic conditions worsen or business expansion slows more than anticipated, the stock could face further pressure. However, the report does emphasize that Palantir possesses existing strengths that have fueled its sales growth and improved margins, especially in the realm of AI.

While the stock currently may not be appealing to investors looking for safety, those willing to adopt a buy-and-hold strategy could potentially benefit if the company successfully capitalizes on its AI leadership.

Stocks: PLTR