Sign InPalantir: technical bounce and strong revenue but DCF $3.89 implies massive overvaluation
Summary
On 08/21/2025, Palantir closed at $156.18 after a hammer candlestick and above-average volume suggesting a short-term bounce, yet hulking revenue growth is counterbalanced by an extreme P/E (520.6) and a conservative DCF of $3.89 that keep analysts largely at Hold.
Technical Snapshot
Palantir (PLTR) closed 08/21/2025 at $156.18, trading in a $153.81–$157.97 intraday range. Volume was 94.25 million versus a 76.65 million average, signaling above-normal interest. Short-term indicators are mixed-to-bullish: RSI 51.00 (neutral), 50‑day MA $153.13 (price above MA), 200‑day MA $105.77 (long-term uptrend intact), MACD (3‑month) 11.48 (positive momentum), ATR $4.83 (~3.10% of price). Immediate technical levels: support $156.01 and resistance $157.75. A hammer candlestick and the end of a six‑session decline were noted on 08/21/2025.
Fundamental Snapshot
Market cap: $355.19 billion. TTM EPS $0.30; P/E 520.60, reflecting extreme price multiple versus earnings. Latest news (08/21/2025) shows mixed sentiment: commercial revenue growth cited at +48% YoY and notable enterprise customer wins, counterbalanced by commentary that the stock’s valuation is “quite out of whack.” Analyst coverage: consensus "Hold" (5 Buy, 14 Hold, 5 Sell); median target $162.50, consensus target $150. High/low analyst targets range $200/$84. Next earnings: 11/03/2025. DCF result provided: $3.89 per share.
Near‑Term Outlook — Next Trading Day (08/22/2025)
Probable range: $152.50–$159.50. Given near-term support at $156.01 and resistance at $157.75, the most likely outcome is a modest, low‑volatility continuation or slight rebound: expectancy ≈ flat to +1.00% (higher if market breadth is positive). Elevated volume and the hammer reversal increase the probability of a short bounce; a broader risk selloff would likely push a retest toward $150–$152.
Upcoming Week Outlook
Over the next five trading sessions, the stock can reasonably test the $162–$168 zone if momentum and sector flows remain constructive and commercial growth headlines persist. Conversely, failure to clear $158 with deteriorating market sentiment could see a pullback toward the 50‑day MA (~$153) or consolidation in the $145–$155 band. Key drivers: overall AI/tech sentiment, any micro headlines about large commercial deals, and positioning ahead of the 11/03 earnings announcement.
Intrinsic Value & Long‑Term Investment Potential
The provided DCF intrinsic value of $3.89 per share implies a material disconnect versus the market price ($156.18) — a valuation gap that cannot be dismissed. That DCF outcome suggests current price embodies expectations of extraordinary, sustained growth and margin expansion not reflected in conservative cash‑flow assumptions.
Fundamental positives: strong commercial revenue growth (~+48% YoY reported), durable enterprise integrations, and rising client stickiness — factors that support a multi‑year growth thesis. Fundamental negatives: very low trailing EPS ($0.30) relative to market capitalization, an extreme P/E (520.60) indicating the market is pricing in a near‑term transition to significantly higher profitability, and sensitivity to execution or competitive setbacks in AI and software sales.
Conclusion on intrinsic value: under conservative DCF assumptions, PLTR appears materially overvalued today. Under aggressive, high‑growth scenarios (sustained mid‑ to high‑teens or higher revenue growth with margin expansion), fair value could be substantially higher than the conservative DCF but would require execution that meaningfully outperforms recent history.
Overall Evaluation — Hold
Rationale: The stock displays mixed technicals with a constructive short‑term setup (hammer, positive MACD, price above the 50‑day MA) and strong revenue growth momentum in the commercial segment. Offsetting these positives is a steep valuation premium (P/E 520.60) and a DCF figure that implies significant overvaluation under conservative cash‑flow assumptions. Analyst consensus leans toward Hold, and median price targets sit close to the current price.
Classification: Hold — justified by strong growth narrative and technical signs of stabilization, but tempered by stretched valuation and the need for continued, materially better-than‑expected execution to justify current pricing.
