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Investing.com - RBC Capital has reiterated an Underperform rating and $45.00 price target on Palantir Technologies Inc. (NASDAQ:PLTR) ahead of the company’s third-quarter earnings report. According to InvestingPro data, the company currently trades at significant premiums across multiple valuation metrics, with a P/E ratio of 630x.
The software company is scheduled to release its Q3 financial results on November 3 after market close, according to RBC Capital’s research note. Despite valuation concerns, the company maintains impressive gross profit margins of 80% and has shown strong revenue growth of 39% over the last twelve months.
RBC Capital cited "unfavorable risk/reward" as the primary reason for maintaining its cautious stance on the stock, noting that Palantir shares have risen approximately 20% over the past three months, compared to roughly 4% for the iShares Expanded Tech-Software Sector ETF (IGV). The stock’s remarkable performance extends beyond recent months, with a year-to-date return of 136%.
The research firm pointed out that Palantir is trading at more than 20 times its enterprise value to estimated calendar year 2026 revenue, making it one of only three companies in RBC’s All-SaaS coverage with such a high valuation multiple.
RBC Capital stated it "cannot rationalize why Palantir is the most expensive name in our software coverage" and suggested the current valuation "seems unsustainable" without a significant earnings beat and raised guidance that would elevate the company’s near-term growth trajectory.
In other recent news, Palantir Technologies has been involved in several significant developments. Piper Sandler raised its price target for Palantir to $201, maintaining an Overweight rating, due to the company’s strong revenue visibility and substantial contract value. Additionally, Palantir has entered into strategic partnerships with both Lumen Technologies and Snowflake. The collaboration with Lumen aims to integrate Palantir’s AI platforms with Lumen’s network infrastructure, facilitating faster AI deployment for enterprises. Meanwhile, the partnership with Snowflake focuses on enhancing data pipelines and AI applications for commercial and public sector customers.
Red Cat Holdings successfully tested its Black Widow drone using Palantir’s Visual Navigation Software, demonstrating effective navigation in GPS-denied environments. This test marks a significant milestone, as it is the first known commercial demonstration of such software on a drone within a U.S. Army program. In other company news, Surf Air Mobility appointed Shawn Pelsinger, a former Palantir executive, to its Board of Directors. These developments highlight Palantir’s expanding influence across various sectors and its ongoing collaborations with industry leaders.
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