Palantir Technologies (PLTR): fair value

Fair-value band

The normal range for this name runs from $65 (cheap) to $416 (expensive); it is now priced at $169.

That is 0.6σ below this name's own normal premium.

Is Palantir Technologies undervalued?

Fair, relative to its own history. Palantir Technologies trades at $169, 121% above the fair value this model estimates, but it has habitually traded 215% above fair value, and today's gap is 0.6σ below that norm, within the range it normally trades in, so the verdict is Fair: priced normally for itself, not necessarily fairly valued.

Diligence checklist

6 pass · 2 fail · 3 no data

• PASSCash actually collected from profit, median of the last 3 years: 192%XBRL · Over the last three years Palantir has typically got $1.92 of real cash for every $1 of reported profit, which means profits are real and not just numbers on paper. That's a good sign.
• PASSGap between paper profit and real cash: -4.0%XBRL · Palantir's "profit on paper" and "cash in the bank" gap is small enough to pass.
• PASSDebt compared to one year of cash earnings: -0.96xXBRL · Palantir holds more cash than debt, so there is no leverage question to answer here. A balance sheet in this shape can fund a bad year out of its own pocket instead of asking a lender for permission.
• PASSHow much more it earns on capital than that capital costs: +17.03ppXBRL · Return on capital is far higher than what that capital costs, so every dollar Palantir puts to work turns into much more than a dollar of value. A +17 point gap is wide: reinvesting is genuinely worth doing here, which is what makes growth valuable rather than merely expensive. The gap is wider than it was at the start of the window.
• FAILStock sold by executives and directors on the open market, last 6 months: $125.2MEDGAR (dealbreaker) · Karp Alexander C. sold $54.1M of stock in the last 6 months, outside any pre-planned selling schedule, and $125.2M went out that way in total. My rulebook says more than $5 million of this kind of selling is disqualifying for a "long" position (buying the stock). The full list of open-market sellers: Karp Alexander C. $54.1M, Cohen Stephen Andrew $43.5M, Sankar Shyam $22.5M. A further $138.4M went out under pre-planned 10b5-1 schedules, which I don't count: those sales are set up months ahead and say nothing about what management thinks today. Options being exercised, and shares held back to cover the tax on them, are not sales and I don't count them either. filing ↗
• N/AHow long the CEO has run this company: n/aTEXT · I couldn't establish when Palantir's current chief executive took the job: no appointment appears in the 8-K item 5.02 history.
• N/AProfit margin held up during the last sales slump: n/aXBRL · There's no revenue downturn in Palantir's filed record, or gross profit isn't tagged, so this test has nothing to measure. It needs a bad patch to look at: without one, whether customers would stay through a price rise is untested rather than proven.
• FAILNormal profit margin across a full business cycle: FCF margin 55.6% vs 29.8% medianXBRL · Palantir is earning a 55.6% cash margin against a long-run average of 29.8%, 87% better than normal. This is what a cycle peak looks like, and paying for peak margins as though they were permanent is the classic way to overpay for a good business. My valuation grows the average instead. Across the window the margin ran between 9.8% in December 2022 and 55.6% in September 2026.
• N/AHow much of the stock trades on an average day: $4,854MMARKET · Palantir trades so much volume that this basically isn't a concern. There's no pass or fail here because the answer depends on how big a position I'd actually want to take.
• PASSShare of revenue from its single biggest customer: no customer 10%+ of revenue disclosedTEXT · Palantir's February 17, 2026 10-K doesn't disclose any customer at 10% or more of revenue. The accounting rules require that disclosure only when it applies, so its absence means no single customer clears that bar, which is well inside the quarter of revenue where I stop work. This comes from the filing's prose rather than a tagged number: the percentages sit in an XBRL field the SEC's bulk data drops. filing ↗
• PASSWhether the company switched auditors in the last 2 years: noneEDGAR · Companies sometimes switch accounting auditors right before something bad is uncovered which can be a warning sign. Palantir hasn't changed auditors in the last 2 years, so there's no such red flag here.