Palantir: Analysts Warn Against Buying the Stock

Analysts issue strong sell recommendation for Palantir Technologies

Analysts are urging investors to avoid Palantir Technologies (NYSE: PLTR), citing concerns over its slowing growth and high valuation. Several brokerages have downgraded the stock to "sell," including Morgan Stanley, Goldman Sachs, and Citigroup. The consensus among these analysts is that Palantir's recent financial performance and future prospects do not justify its current stock price.

Palantir's growth has slowed significantly

One of the primary reasons for the analysts' negative outlook is Palantir's decelerating growth. The company's revenue growth has slowed from 49% in 2021 to just 22% in the first quarter of 2023. This slowdown is expected to continue, with analysts forecasting revenue growth of only 15% in 2023 and 10% in 2024.

Palantir's valuation is too high

In addition to its slowing growth, analysts are also concerned about Palantir's high valuation. The company's stock is currently trading at a price-to-sales (P/S) ratio of over 30, which is significantly higher than the average P/S ratio of software companies. This high valuation is not justified by Palantir's current financial performance or future growth prospects.

Analysts recommend selling Palantir stock

Given their concerns about Palantir's slowing growth and high valuation, analysts are recommending that investors sell the stock. Morgan Stanley has set a price target of $6 per share, while Goldman Sachs has set a target of $5 per share. Citigroup has the most bearish view of Palantir, with a price target of just $4 per share.

Conclusion

Analysts are urging investors to avoid Palantir Technologies stock. The company's slowing growth and high valuation are major concerns, and analysts believe that the stock is overvalued. Investors should consider selling their Palantir stock and looking for better investment opportunities elsewhere.