PLTR
📈 Palantir trades at an extremely high forward price-to-earnings (P/E) ratio, estimated around 300x by the speaker.
⚠️ This high valuation signifies that the market has already priced in significant future growth, making the stock vulnerable to sharp declines if growth expectations are not met.
⚖️ The speaker considers Palantir too risky for long-term investment due to this valuation risk, contrasting it with potentially less risky opportunities where market sentiment is more negative (like Pinduoduo at the time).
@bernardodegarcia:
“Do you think Palantir is investable? For me, Palantir is too risky because, you know, you can enter Palantir and make money for one or two days, you know, if you like day trading or whatever you want, okay? For day trading, okay. But if you want to invest in Palantir, the biggest risk of Palantir is that it’s trading at 300 times future earnings. And you say, ‘Well, but Palantir is growing very fast.’ Yes, that’s true, but then the higher this is… this doesn’t mean the company is… let’s put it another way. This doesn’t mean a forward P/E of 300 times means it’s expensive or cheap. It’s telling you that the market is discounting a lot of future growth. So, if at some point the company starts to falter in that future growth that is already discounted, then suddenly the valuations will fall, and that’s the problem. Because this company right now, 300 times is crazy, but imagine this company goes from $92 to… well, no, but eh, from $92 to $30, and the P/E transforms into a P/E of 30, and it’s still somewhat expensive, okay? So it could fall to $15, and the company would be trading at about 15 times, more or less, and you say, ‘Well, that’s fine.’ It all depends on what growth the market is discounting. What happens? The market, as we know, is quite a bipolar being. On many occasions, it’s euphoric, and on others, it’s totally manic-depressive. Right now, I think with this type of company, it’s euphoric. This doesn’t mean it’s a good or bad company; it has nothing to do with it, okay? But, ah, yes, there is that inherent risk in the investment, since if at some point the company starts to falter, the market, being bipolar, will go from euphoric to ‘I don’t even want to see you,’ okay? So the valuations will fall, the market will be less interested, there will be less demand, and well, the company will continue to function the same, it will continue to be a super-powered company with hopefully good growth, but maybe, well, in some years it will falter, but the shares will suffer, and you’ll be stuck there saying, ‘Well, it’ll go up eventually, damn it.'”
Watch the exact part of the video where @bernardodegarcia talks about Palantir Technologies here:
Watch the video on YouTube
Read more articles analyzing Palantir Technologies (PLTR) at the provided link. PLTR stock.
