Palantir Technologies (PLTR) Earnings Preview: To Buy or Not Before the Storm?

$Palantir Technologies Inc.(PLTR)$ is set to release its Q1 2025 earnings on May 5, with shares trading near all-time highs at $124.28 (up 6.95% on May 2). Here’s a breakdown of key factors to determine if PLTR is a buy ahead of earnings:

1. Recent Performance & Market Sentiment

Price Surge: PLTR has rallied 38% in the past two weeks , nearing its 52-week high of $125.41. The stock is up ~400% over the past year , driven by AI optimism and defense contracts.

Options Activity: High volatility priced in (IV ~140-145% for near-term options). Calls at the $125 strike show heavy open interest, signaling bullish bets. However, the probability of profit for these calls is just 34% , reflecting uncertainty.

Short Interest: Short volume ratios hover around 15% , suggesting skepticism despite the rally.

2. Earnings Expectations & Catalysts

Revenue: Consensus at $862.8M (up 36% YoY), aligning with management’s guidance of $858–862M. Key drivers include:

Government Segment: Expected to grow 37.4% YoY (NATO’s $480M AI contract for battlefield systems).

Commercial Segment: U.S. commercial revenue surged 40% in Q4 2024 , likely sustaining momentum.

EPS: Analysts expect $0.13 (up 62.5% YoY). Palantir has beaten EPS estimates in 5 of the last 6 quarters.

3. Valuation & Risks

Sky-High Multiples :

P/E TTM: 654x (vs. sector median ~25x).

Price/Sales: 102x (vs. sector median ~6x).

Rationale: Investors price in dominance in AI-driven government/data analytics.

Analyst Caution: Average price target of $90.04 (28% below current price). Only 3 "Buy" ratings vs. 15 "Hold" and 4 "Sell."

4. Post-Earnings Price Scenarios

Bull Case (Beat & Raise) : A revenue/guidance beat could propel PLTR above $130, testing technical resistance. Catalysts:

Accelerating U.S. commercial adoption.

Expansion of NATO/defense contracts.

Base Case (In-Line) : Stock may consolidate near $120–$125, with volatility easing.

Bear Case (Miss or Weak Outlook) : Pullback toward $110–$115 (support from April’s rally). Risks include:

Federal spending cuts.

Unsustainable valuation.

5. Strategic Takeaway

Short-Term Traders : High-risk/reward. Options imply a ±10% move post-earnings . Consider defined-risk strategies (e.g., straddles).

Long-Term Investors : Wait for post-earnings clarity. Entry points below $110 (25% below current price) improve margin of safety.

Watch: Management’s commentary on AI monetization and government contract pipelines.

@CaptainTiger @Tiger_comments @Daily_Discussion @Tiger Community

Palantir Hits New Highs: Time to Buy or Time to Bail?

Palantir hit a new high during last Wednesday’s rally and is now fluctuating between $120 and $130. Will Palantir defy the "Sell in May" curse and continue to rise? After becoming the best-performing stock in the S&P 500 in 2024, how likely is it that Palantir will continue to deliver outsized gains? Given its extremely high valuation, what is your price expectation for Palantir?

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