Palantir sells the software that governments and companies use to pull their data together and put AI to work on it. Revenue is growing more than 90% a year and the business is highly profitable, but at about 60 times this year’s sales the shares price in far more than that.
Today’s close against the report’s numbers, updated every weekday. The analysis is as of October 21, 2026; the rating as of October 22, 2026. Both change only when the report is revised.
The scenario model’s bear-to-bull range, the probability-weighted value, the price, its 52-week range and the analysts’ average target. The copper line marks the base case; the fine dotted line is today’s close.
Written on October 21, 2026, ahead of its third-quarter results on November 2. Figures are from the company’s filings and releases unless noted. Not investment advice. The author holds no PLTR shares directly.
Palantir builds software that joins up an organisation’s data and lets people, and now AI models, act on it. Gotham and Maven serve defence and intelligence agencies; Foundry does the same for companies; AIP, launched in 2023, puts large language models to work inside both. Customers usually start with a short “bootcamp” and expand from there.
Government is still the larger half. In the U.S. it includes the Army’s enterprise agreement of up to $10 billion over ten years, signed in 2025. The faster-growing half is U.S. commercial, where AIP has turned Palantir from a slow-moving consultant-heavy business into one that sells like software.
The second quarter, reported on August 3, beat estimates and brought the largest guidance raise in the company’s history: 2026 revenue of about $8.15 billion, up about 82%, with U.S. commercial revenue above $3.4 billion. Adjusted free cash flow was $1.22 billion in the quarter, 63% of revenue, and the “Rule of 40” score (growth plus margin) reached 155%. U.S. commercial contracts signed in the quarter were worth a record $2.1 billion.
For the third quarter Palantir guided to revenue of $2.16 billion, about 12% more than the second. The shares reached a record $212.94 on October 12, then fell 7% on October 16 with other AI software names, with no company news. Results come on November 2.
| FY2021 | FY2022 | FY2023 | FY2024 | FY2025 | TTM Jun 2026 | |
|---|---|---|---|---|---|---|
| Revenue | $1.5B | $1.9B | $2.2B | $2.9B | $4.5B | $6.2B |
| Operating margin | −26.7% | −8.5% | 5.4% | 10.8% | 31.6% | 42.8% |
| Net income | −$0.5B | −$0.4B | $0.2B | $0.5B | $1.6B | $3.0B |
| Operating cash flow | $0.3B | $0.2B | $0.7B | $1.2B | $2.1B | $3.4B |
| Capital spending | $0.0B | $0.0B | $0.0B | $0.0B | $0.0B | $0.0B |
| Free cash flow | $0.3B | $0.2B | $0.7B | $1.1B | $2.1B | $3.4B |
Palantir lost money until 2023. Since then revenue growth has sped up every year while costs grew slowly, so almost every new dollar of revenue has reached profit. Stock-based pay is still large, about $840 million over the past twelve months, but it has fallen from about half of revenue in 2021 to about 14%. The margins in this report are after stock pay. The quarterly view shows each quarter from the 10-Qs.
At the end of June Palantir held about $9.4 billion of cash and short-term Treasuries and had no borrowings. Dilution from stock pay is the main cost to shareholders: this model assumes about 2.6 billion diluted shares by 2030, roughly 1% a year more than today. Co-founders hold super-voting shares, so outside shareholders have little say over the company.
Valued like the other fast growers on this site: revenue and operating margin in 2030, taxed at 21%, times an exit multiple, discounted back four years at 14% (beta 2.0 gives a CAPM cost of about 14.2%), plus net cash and the free cash flow earned along the way (a straight line from about $3.4 billion over the last twelve months to 80% of 2030 after-tax profit).
| Bear | Base | Bull | |
|---|---|---|---|
| Revenue in 2030 | $18B | $28B | $45B |
| Growth a year from 2026 | 22% | 36% | 53% |
| Operating margin after stock pay | 40% | 50% | 55% |
| Exit multiple | 25× | 30× | 45× |
| Value per share | $41 | $87 | $216 |
| Probability | 25% | 50% | 25% |
Weighted 25/50/25: $107. Even the base case is generous: revenue more than triples in four years and the margin stays near today’s record.
Every figure in this valuation comes from one model script, rerun and checked against this page each time the site is built. The XLSX model rebuilds it in live formulas: change any blue input and every year’s cash flow, the bridge to the value, the scenarios and the sensitivity table recalculate.
| To justify the price, you need | Against |
|---|---|
| About $42 billion of revenue in 2030 at a 55% margin and 45× earnings | About $8 billion this year; about 50% growth a year for four years |
| Or about $68 billion of revenue at the base margin and multiple | More than eight times this year’s revenue |
The market is paying today for the outcome that has everything go right. That is possible for a company growing this fast, but it leaves no room for a slowdown. The analysts’ average target of $206 is close to the price; their range runs from $80 to $265.
| Risk | Why it matters |
|---|---|
| Valuation | About 60× this year’s revenue: a small slowdown can mean a large fall in the price. |
| Government budgets | About 40% of revenue is U.S. government; spending priorities and contract timing can change. |
| Competition | Cloud providers and AI labs are building their own enterprise data and agent tools. |
| Stock pay and control | Dilution continues, and super-voting shares leave founders in charge. |
| AI software sentiment | The shares move with the wider AI trade, as in October’s 7% one-day fall. |
Upside: AIP spreading through large companies faster than expected, more defence work (Maven, the Army agreement, allies), and margins rising further as revenue scales.
Few software companies have ever grown this fast at this size while earning these margins. The price matches the model’s bull case: it needs about 50% growth a year for four years at a record margin.
What would change the value: Several more quarters of 80%-plus U.S. commercial growth would lift the base case; any slowdown would hit a price with no room for one. Third-quarter results come on November 2.
Ranges, not three cases. The expected value is the average of 4,000 runs of this report’s own model, with every input drawn from a range: the base case is the middle, and the bear and bull cases are the 10th and 90th percentiles. Business inputs move together; the discount rate moves on its own. The 25/50/25 weighting in the valuation section gives $107. How the ranges work
Two different questions. The rating is relative: it asks whether the stock is cheaper or dearer than the S&P 500 on the same assumptions. The absolute view asks whether it is worth its price at all: on its own the stock trades above our estimated value, which is 47% below the price.
On the same assumptions every report uses (a 5.15% Treasury yield and a 4.5% equity premium), the S&P 500 itself is worth about 68% of its price. The rating compares each stock with that: Buy if it is at least 15% cheaper than the market on this basis, Sell if at least 15% dearer, Hold in between. It is the same rule for every company, whoever owns it. The rating depends on that assumption: it would be Hold if the index grows 6% a year and Sell at 10%, against 8% here. How ratings work
Against the Street: The analysts’ average of about $206 is close to the price. The gap with this model is mostly the exit multiple (30× base against the 45× or more the price implies) and a 14% discount rate from Palantir’s beta of about 2.
| Measure | Palantir Technologies | Industry median | Rank | |
|---|---|---|---|---|
| Revenue growth, last fiscal year | 56.2% | 14.1% | 1 of 14 | Better than the median |
| Operating margin | 42.8% | 26.2% | 2 of 14 | Better than the median |
| Price to earnings | 167.3× | 26.5× | 12 of 13 | Worse than the median |
| Free cash flow yield | 0.7% | 5.1% | 13 of 14 | Worse than the median |
Peers: the 13 other S&P 500 companies in Application Software with complete data (ADBE, ADSK, CDNS, CRM, DDOG, FICO, INTU, ORCL, PTC, SNPS, TRMB, TYL, WDAY). Last twelve months where reported, from SEC filings; prices from the latest close. A lower price-to-earnings ratio ranks higher. These figures update with each data run; the rating does not.
Palantir has earned its premium; the shares already pay for the next four years of it.
| What | Figures | Source |
|---|---|---|
| Latest results | $1.94B (Revenue, Q2 2026, +93%), $764M (U.S. commercial, +149%), $809M (U.S. government, +90%), 47% (GAAP operating margin) and others | Q2 2026 results; Guidance raise; October selloff |
| The numbers (five-year table) | Five years of annual figures and the last twelve months | SEC XBRL company facts; latest: 10-K for the period to 2025-12-31, 10-Q for the period to 2026-06-30 |
| Price at writing | $201.72 (Close, Oct 21, 2026) | Yahoo Finance; the time of the quote is stated beside the price |
| Discount rate inputs | 10-year Treasury 5.15%, equity risk premium 4.5% | Fixed for every report so they can be compared; How ratings work |
| Valuation | Every value, case and sensitivity | This site’s model: XLSX, CSV |
| Checked by hand | Not yet | Reports are added to the audit log as they are revised |
| Input | Bear (10th percentile) | Base (median) | Bull (90th percentile) |
|---|---|---|---|
| Revenue, target year | $18B | $28B | $45B |
| Margin, target year | 40.0% | 50.0% | 55.0% |
| Exit multiple | 25× | 30× | 45× |
| Simulation result | |
|---|---|
| Expected value (average of 4,000 runs) | $107.05 |
| Likely range, 10th to 90th percentile | $45.40 to $194.28 |
| Median | $90.59 |
| Chance the value is above the price | 9% |
| Chance it is cheaper than the S&P 500 | 25% |
Each input is drawn from a split normal: its bear and bull values are the 10th and 90th percentiles, so the two sides can differ. Business inputs share a common factor (correlation 0.6); the discount rate is the same in every case, so it is not drawn. Inputs not listed are held at their base value. How the simulation works.