Palantir Stock Dips Premarket As Jefferies Sounds Valuation Alarm: Retail Has Mixed Feelings

Palantir ($PLTR) dipped by 2% pre-market Thursday after Jefferies downgraded the AI-focused data analytics firm’s stock to ‘Underperform’ from ‘Hold’ citing high valuation concerns. 

Analyst Brent Thill kept a price target of $28, expressing worry that Palantir’s valuation, currently 38 times its projected 2025 revenue, makes it the most expensive among software companies.

To sustain its current valuation, Thill estimates Palantir would need to achieve 40% annual revenue growth over the next four years. 

Even then, by 2028, the company would be trading at 12 times its revenue, a level that Jefferies finds unsustainable. 

The brokerage also noted an increase in insider selling via 10b5-1 trading plans, which may suggest caution about future performance. 

According to Barron’s, Palantir executives are reportedly planning to sell 11.5 million shares of the company valued over $580 million in the coming months through March 2026.

Jefferies’ downgrade comes after the company reported third-quarter earnings and revenue that exceeded Wall Street estimates after the bell on Monday. It also raised its full-year guidance to $2.805 billion-$2.809 billion from  $2.74 billion-$2.75 billion. 

Retail sentiment on Stocktwits sentiment is divided between users who believe

Retail sentiment on Stocktwits shows mixed feelings. Some investors are bullish on Palantir’s growth potential, while others are concerned about its high valuation and insider sales.

Meanwhile, Goldman Sachs analyst Gabriela Borges raised the firm's price target on Palantir to $41 from $16 while maintaining a ‘Neutral’ rating on the shares. 

Borges stated that Goldman had "underestimated" the strong growth Palantir is likely to experience in 2024 from the use of its core technologies, such as data integration and custom AI solutions, to address the needs of large business clients.

However, Goldman echoed Jefferies’ concerns about valuation, cautioning that Palantir’s current stock price already reflects high expectations around its AI capabilities, which could limit further upside.

Palantir’s stock has surged 233% in 2024, significantly outperforming the S&P 500 ($SPY).

For updates and corrections email newsroom@stocktwits.com.

Read more: Palantir Stock On Track To Open At Record High Following Beat-And-Raise Q3, Retail Lose Sleep Over Valuation

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