Palantir Technologies Stock Overview

Palantir Technologies (NYSE:PLTR) has experienced a remarkable 257% gain year-to-date (YTD), largely attributed to multiple expansion.

Trading Multiples

According to Jefferies analysts, Palantir currently trades at a multiple of 43 times its calendar year 2025 revenue, which is over twice that of the next highest software company.

Following its addition to the S&P 500, retail ownership decreased by 7 percentage points to 42%, while institutional ownership has increased to 25% and 27% for index and active ownership, respectively.

Revenue Multiple Surge

Jefferies highlighted a 202% revenue multiple expansion YTD, with Palantir now trading at 43 times enterprise value to next twelve months (NTM) revenue. Jefferies stated, “The last time we saw such high levels of multiple expansion was during the Covid bubble.” However, they noted, “We are in a more normalized macro environment, and PLTR stands alone with its YTD multiple expansion >4x the next highest infra peer.”

Insider Trading Activity

Recent insider trading activity has seen an uptick in sales under Rule 10b5-1 trading plans. Notably, CEO Alex Karp sold nearly 40 million shares worth over $1.9 billion in the last three months. His trading plan also allows for the sale of approximately 9 million additional shares until May 2025.

Analyst Ratings

Citing the “unsustainable multiple,” Jefferies has reiterated an Underperform rating on Palantir stock with a price target of $28, suggesting nearly 60% downside from current levels.

Shareholder Composition Changes

Analysts attribute the recent changes in Palantir's shareholder composition, at least in part, to its inclusion in the S&P 500, which led index funds to purchase shares. Additionally, the company's switch from the NYSE to Nasdaq and its intention to join the Nasdaq 100 is seen as an effort to boost index shareholder ownership, although it may not significantly alter the shareholder mix compared to the S&P 500 inclusion.