Should You Buy Palantir Stock After Its 170% Gain in 2024? Wall Street Has a Clear Answer for Investors

Palantir Technologies (PLTR) has been on a tear in 2024, with its stock price surging 170% year-to-date. The company's impressive performance has caught the attention of investors, but the question remains: is it too late to buy Palantir stock, or is there still room for growth? To answer this, we'll examine Palantir's fundamentals, valuation, and Wall Street's perspective.


**Fundamentals: Strong Growth and Profitability**

Palantir's Q3 2024 earnings report showcased robust growth, with revenue up 30% year-over-year (YoY) and 7% quarter-over-quarter (QoQ). The company's U.S. commercial sales grew 54% YoY, driven by a 12% increase in top 20 customer revenue to $60 million each. Palantir's adjusted income from operations margin stood at 38%, indicating strong profitability.


**Valuation: Overvalued or Undervalued?**

Palantir's P/E ratio of 255.65 and EV/EBITDA of 113.62 suggest it's overvalued compared to its peers and the broader market. Despite its impressive 170% gain in 2024, its high valuation may indicate that the market has priced in much of its expected growth. Its P/E ratio is significantly higher than the S&P 500's average of around 18, and its EV/EBITDA is higher than the median for software companies.


**Wall Street's Perspective**

Wall Street analysts have a clear answer for investors: hold or sell. Out of 16 analysts covering Palantir, only 1 has a buy rating, while 13 have a hold rating, and 2 have a sell rating. The average price target is $45, indicating a potential downside of around 11% from its current price of $51.13.


**Conclusion**

While Palantir's fundamentals are strong, with impressive revenue growth and profitability, its high valuation may be unsustainable. Wall Street analysts' cautious stance on the stock suggests that investors should approach Palantir with caution. Although the company's growth prospects are promising, the risk of overvaluation and potential short-term setbacks may outweigh the benefits of investing at current levels. As always, it's essential to conduct thorough research and consider your risk tolerance before making any investment decisions.