PLTR Falls 7.5% In A Single Day, Things To Be Wary Of When Buying The Stock

We believe there is not much to fear in PLTR stock given its overall Very Strong operating performance and financial condition. Hence, despite its Very High valuation, the stock appears Attractive but Volatile. Here is our multi-factor assessment.

PLTR stock has fallen meaningfully recently and we currently find it attractive but volatile. While this may feel like an opportunity, there is significant risk in relying on a single stock. On the other hand, there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Trefis works with Empirical Asset Management – a Boston area wealth manager – whose asset allocation strategies yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Empirical has incorporated the Trefis HQ Portfolio in this asset allocation framework to provide clients better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Let’s get into details of each of the assessed factors but before that, for quick background: With $409 Bil in market cap, Palantir Technologies provides software platforms that help U.S. intelligence identify hidden patterns in data and support counterterrorism investigations and operational collaboration.

[1] Valuation Looks Very High

This table highlights how PLTR is valued vs broader market. For more details see: PLTR Valuation Ratios

[2] Growth Is Very Strong

• Palantir Technologies has seen its top line grow at an average rate of 25.7% over the last 3 years
• Its revenues have grown 39% from $2.5 Bil to $3.4 Bil in the last 12 months
• Also, its quarterly revenues grew 48.0% to $1.0 Bil in the most recent quarter from $678 Mil a year ago.

This table highlights how PLTR is growing vs broader market. For more details see: PLTR Revenue Comparison

[3] Profitability Appears Strong

• PLTR last 12 month operating income was $570 Mil representing operating margin of 16.6%
• With cash flow margin of 50.3%, it generated nearly $1.7 Bil in operating cash flow over this period
• For the same period, PLTR generated nearly $763 Mil in net income, suggesting net margin of about 22.2%

This table highlights how PLTR profitability vs broader market. For more details see: PLTR Operating Income Comparison

[4] Financial Stability Looks Very Strong

• PLTR Debt was $238 Mil at the end of the most recent quarter, while its current Market Cap is $409 Bil. This implies Debt-to-Equity Ratio of 0.06%
• PLTR Cash (including cash equivalents) makes up $6.0 Bil of $7.4 Bil in total Assets. This yields a Cash-to-Assets Ratio of 81.5%

[4] Downturn Resilience Is Moderate

PLTR saw an impact slightly worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• PLTR stock fell 84.6% from a high of $39.00 on 27 January 2021 to $6.00 on 27 December 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 3 October 2024
• Since then, the stock increased to a high of $187.05 on 2 October 2025 , and currently trades at $173.07

 
2020 Covid Pandemic

• PLTR stock fell 22.5% from a high of $29.05 on 25 November 2020 to $22.51 on 2 December 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 22 January 2021

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read PLTR Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.