PLTR Stock In Focus: Exec Says 'It's Gonna Be Very Hard To Value Palantir' As Commercial Business Surpasses US Government Revenue

• Palantir executive Louis Mosely called the company's commercial business growth a major milestone. 
• He added that Palantir's unprecedented revenue and margin growth will make analysts’ job of valuing the company more difficult. 
• Meanwhile, Jefferies maintained its ‘Underperform’ rating and $80 price target on PLTR.

Palantir Technologies Inc. (PLTR) stock is drawing attention after the company’s U.S. commercial revenue surpassed government sales for the first time, marking a major shift in its business mix. Executive Louis Mosely highlighted 148% commercial growth and margins above 60%, adding that the company's unprecedented performance makes valuation increasingly difficult. 

Palantir Technologies stock traded over 1% lower overnight, ahead of Wednesday. 

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Palantir’s Commercial Revenue Overtakes Government Business

For the first time, Palantir's U.S. commercial business brought in more revenue than its government operations. Commercial revenue jumped 148% from last year to $984 million in the third quarter, while revenue from U.S. government customers grew 96% to $953 million. 

In an interview with Bloomberg, Louis Mosely, Palantir's executive vice president for the U.K. and Europe, called the development a major milestone for the company. “I think it's a very significant milestone and it's an indicator of the direction of travel for the company. 

The development marks a notable change for Palantir, which has spent much of its history building its reputation through government and defense-related work. 

Government Partnerships Remain Important For Palantir

Despite the expanding corporate business, Palantir does not expect its relationship with the U.S. government to weaken. Mosely pointed to the company's two-decade operating history, during which it has worked with administrations from both major political parties and served under different congressional leadership.

“I think the US's commitment to its defense establishment, its responsibilities around the world, remains very strong. Palantir is a key part of that, and I can't see that changing,” said Mosely on the U.S. midterm elections. 

Palantir’s 148% Growth Makes Valuation A Challenge

Mosely also highlighted the company's performance in the U.S. commercial market, where revenue growth reached 148%. The business delivered that expansion while maintaining adjusted net margins above 60%, a combination he described as highly unusual among publicly traded software companies.

He pointed to Palantir's exceptional Rule of 40 performance, which measures a software company's revenue growth and profitability together. “So our rule of 40 is way, way up there. If you look at that quadrant, there is no other software company on public markets that is anywhere close to that.”

“So it's an unprecedented situation, and I think I have some sympathy for the analysts. It's gonna be very hard to value Palantir because their spreadsheets, their models don't allow for something that's happening that fast on that kind of scale.”

On Tuesday, Jefferies acknowledged that Palantir delivered strong Q3 results but said the bigger challenge now is maintaining rapid growth as comparisons with last year's results become tougher. The firm remains bearish on PLTR, maintaining an ‘Underperform’ rating and an $80 price target. It prefers Microsoft, Oracle and Snowflake, which it believes offer better growth opportunities at more attractive valuations. 

PLTR Stock: Retail Stance 

On Stocktwits, retail sentiment around the stock remained ‘bullish’. 

A user said, “Market gonna tank tomorrow with these election results. Buy them while they’re cheap :)” 

PLTR  stock has dropped to 1% year-to-date.  

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