Analyst hikes Palantir price target after conference comments
But the Street’s target is still way behind the market price.
Mizuho analysts lifted their price target on Palantir shares to $116 from $94 on Wednesday, following comments company executives made at the Japanese bank’s technology conference in New York this week.
The synopsis of those comments provided in a brief note Wednesday aren’t awe-inspring. Basically Palantir CFO David Glazer restated the company’s default position that there is “unprecedented” demand for the software company’s AI Platform (AIP) product. Mizuho wrote:
“We are raising our price target to $116 (from $94) on Palantir’s strong recent execution and significant upward revisions, along with recent appreciation in competitor multiples. Our price target reflects 2025E-26E EV/ Sales multiples of roughly 80x and 65x. This also equates to a large 6x premium to our enterprise software peer group median for next year, reflective of Palantir’s strong strategic positioning with large customers, and potential for further accelerated growth in future years.”
It’s worth noting that even with that insane valuation — an EV-to-2025-sales multiple of 80x compared to a roughly 5x valuation on the Nasdaq Composite — Mizuho’s price target is still more than 15% below Palantir’s market price.
Mizuho isn’t alone. Since shares of Palantir exploded last year in the wake of the US presidential election, Wall Street price targets for the shares have largely failed keep up.
Despite being incredibly optimistic on the company’s business — Wall Street expects sales to keep growing more than 30% annually through 2027 — analysts simply can’t come up with plausible earnings estimates and valuation multiples that support where the shares have gone, at least in terms of traditional stock market math.
That can happen when a company’s stock is embraced by the unwashed retail masses, as Palantir shares have been, with the price becoming increasingly dependent on euphoric market sentiment rather than actual fundamentals. The textbook example of this phenomenon is Tesla, where the shares have become so divorced from fundamentals like vehicle deliveries and profits that it trades almost entirely on vibes.
