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Palantir Technologies (PLTR) has emerged as the top performer among AI software stocks, enamoring shareholders with its influential data analysis platforms and ramping up revenue growth. Though volatile in recent times, Palantir is among the top-watched companies in 2025. The company's stocks have climbed 23% so far this year, even after declining from an all-time high in February. The company's high performance is a result of both commercial and government sector momentum as well as shareholders' interest in its position in the AI revolution.
Apart from earnings and price action, Palantir's fundamentals are in the spotlight for another reason: cash. Palantir had a free-cash-flow output of more than $1.2 billion during the last year, posting a 44% free-cash-flow margin in 2024, more typical of mature, dividend-paying juggernauts rather than high-growth technology companies. The reading has led some to revisit the company's ostensibly stretched valuation. Though Palantir comes in at a high valuation, the consistency of its profitability and the company's blast-off growth imply a premium that may be warranted.
Against the backdrop of a volatile market environment in which macro headwinds continue to rock sentiment, Palantir's distinctive combination of growth, free-cash-flow generation, and strategic placement in AI makes the company an interesting one to watch in 2025.
About Palantir Stock
Palantir Technologies (PLTR) is a software company based in Colorado that offers artificial intelligence-based data analytics solutions to commercial clients as well as to the government. A player in the software infrastructure industry, Palantir presently has a market capitalization of over $231 billion.
Over the past 52 weeks, PLTR stock has traded between $20.33 and $125.41. Shares are up 23% year-to-date, outperforming the Nasdaq Composite Index's (QQQ) drop of 7%. However, they remain well off their February high following a sharp market correction.
Palantir's valuation is high by historical measures, with a forward price-earnings ratio of 285x as of the most recent price and a price-sales ratio of 76x. These both point toward a high valuation, way ahead of historical norms and industry averages. Yet the company's finances tell a different story: a free cash margin of 44%, that is, $1.25 billion of free cash from $2.87 billion of 2024 revenue.
Palantir does not currently pay a dividend, as the company prioritizes reinvesting cash flow into product development and strategic growth initiatives.
Palantir Beats on Earnings
Palantir released blockbuster Q4 2024 results in which the company's revenue rose 36% year-over-year to $828 million, far exceeding Wall Street estimates. The surge came from hyper-growth in both its U.S. commercial and its government segments, with U.S. commercial revenue increasing 64% and revenue from the government increasing 45%.
Adjusted EPS totaled $0.14, more than three times the $0.05 that the analyst community had expected. GAAP EPS stood at $0.03, and non-GAAP EPS (excluding the effect of stock-based compensation) totaled $0.07. The company's GAAP net income of $79 million represented its fifth quarter in a row of profitability.
Palantir's bottom line also included $460 million in operating cash flow and $517 million in free cash flow, a stellar 63% margin. Most notably, it executed 129 contracts worth over $1 million each, of which 58 were worth over $5 million and 32 were worth over $10 million. Total U.S. commercial contract value increased 134% year-over-year to $803 million.
Palantir reported full-year 2024 revenue of $2.87 billion (29% increase) and net income of $462 million. Management forecasted 2025 revenue to grow 31%, ahead of analyst estimates and cementing its position at the heart of the AI revolution.
The next earnings release is due May 5.
What do Analysts Predict for Palantir Stock?
Palantir is currently tracked by 20 analysts who maintain an overall consensus "Hold" rating, with a split of bullish and neutral views among analysts. The stock holds an average score of 2.85 on Barchart’s 5-point scale, reflecting a modest uptick from 2.53 three months ago. Within that group, there are three “Strong Buy” ratings, 12 “Hold,” one “Moderate Sell,” and four “Strong Sell” recommendations, indicating a mixed outlook.
While Palantir continues to benefit from strong momentum in government AI spending, its elevated valuation remains a point of contention. Trading above $90, the stock sits well above most fair value estimates, and any meaningful shift in analyst sentiment may depend on sustained commercial growth or another earnings beat in its upcoming May 5 report.
