Palantir (PLTR) will report second-quarter results on Aug. 3, and the analysts covering PLTR stock cannot seem to agree on what is coming. PLTR stock fell about 6% after Cleveland Research flagged signs of weak spending among Palantir’s commercial customers. The note was a rare cautious voice on a stock that has mostly drawn praise, and it was enough to worry investors. Baird analyst William Power pushed back the same day, however, reiterating an “Outperform” rating and a $200 price target. A day before that, Oppenheimer analyst Param Singh also kept an "Outperform" rating and a $200 target. Singh expects revenue to grow roughly 85% in Q2. For reference, Palantir’s own Q2 guidance points to revenue of about $1.8 billion, which would mean growth of roughly 80%. So, the analyst believes Palantir will beat its own forecast, something it has done quarter after quarter.
That pattern is why the bulls feel confident. Last quarter, Palantir raised its full-year revenue guidance by its largest amount ever, and management said the real problem is not demand but keeping up with it. CEO Alex Karp noted that U.S. growth is being limited because the company has been unable to fulfill demand. This goes directly against Cleveland’s warning about commercial spending softening.
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The risk for investors is valuation. Palantir stock trades at one of the steepest valuations in software, priced for near-perfect results every quarter. That is what makes Aug. 3 a real test. While the company has been performing strongly, it likely has to beat and raise its full-year outlook again to justify where PLTR stock sits. Two analysts think it will. One is not so sure. The numbers will settle the debate.
About Palantir Stock
Palantir is a software company that develops and deploys data integration and analytics platforms for government agencies, defense organizations, and enterprise clients. Its notable products include Gotham, Foundry, and Apollo. Palantir also partners with companies like Ondas (ONDS) to develop AI-powered surveillance and intelligence solutions. The company is headquartered in Aventura, Florida and was founded in 2003.
Over the last 12 months, PLTR stock has fallen 22%. The stock reached highs near $160 in June, but since then shares have been moving downward. Currently, the stock trades at around $123 per share.
Palantir has significantly underperformed the S&P 500’s ($SPX) 18% gain over the same 52-week period. One of the reasons for the underperformance has been rising competition from market peers. International customers favoring domestic software providers over Palantir also adds to the risk.
www.barchart.com Palantir’s valuation looks expensive by average software standards. The forward price-to-earnings (P/E) ratio of 104.4 times has no meaningful five-year average to compare against, since Palantir only turned consistently profitable recently. Meanwhile, the price-to-sales (P/s) ratio of 65.4 times sits well above the five-year average of 35 times.
The EPS outlook helps justify the high multiples. Analysts expect earnings growth of 86% in fiscal 2026, followed by 42% growth in fiscal 2027. That is a phenomenal growth trajectory for a company of this scale. The balance sheet is near-flawless as well. Palantir holds $8 billion in cash against almost no debt, leaving it firmly net cash positive.
So, the price is the concern for investors, not the balance sheet. While Palantir's high multiples leave little room for error, exceptional growth estimates do well to justify the valuation.
Palantir Delivers Strong Earnings
Palantir released its Q1 2026 earnings report on May 4. Revenue came in at $1.633 billion, up 85% year-over-year (YOY). Within that, commercial segment revenue was $774 million while government revenue was $858 million. Adjusted EPS came in at $0.33, which comfortably beat the Wall Street consensus of $0.28. Palantir’s focus on artificial intelligence (AI) and its applications in the commercial and government sectors has been pivotal in achieving these kinds of results.
Looking forward, Palantir guided for Q2 revenue of $1.797 billion to $1.801 billion. For full-year 2026, management now expects $7.650 billion to $7.662 billion in revenue, its largest-ever full-year revenue guidance. Adjusted free cash flow for the year is expected to be between $4.2 billion and $4.4 billion.
Palantir remains committed to investing in its AI platform and expanding its customer base. On the earnings call, management was asked about growing competition from AI firms entering the enterprise market. Karp replied by saying that while competition for skilled workers remains intense, the company can continue to attract and retain top talent.
What Do Analysts Expect for Palantir Stock?
Analysts will start updating their financial models and issue fresh price targets after the earnings report on Aug. 3. However, on July 30, Rosenblatt analyst John McPeake reiterated a “Buy” rating on Palantir with a target price of $225. In addition, despite lowering its price target from $225 to $200, Citi recently maintained a “Buy” rating on PLTR stock. The firm expects Palantir’s U.S. commercial business to recover in Q2 after experiencing slower growth in Q1.
Based on 29 Wall Street analysts with coverage, PLTR stock has a consensus “Moderate Buy” rating. Out of those analysts, 20 have a “Strong Buy” rating, seven have a “Hold” rating, one has a “Moderate Sell," and one has a “Strong Sell” rating. The mean price target of $192.56 reflects 57% potential upside from current levels, while the high price target of $255 implies impressive potential upside of 107% from here.
www.barchart.com On the date of publication, Jabran Kundi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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