Palantir Technologies(PLTR) The Motley Fool·2025-03-05 20:30Core Viewpoint - Wall Street is becoming more optimistic about Palantir Technologies following a recent sell-off, with the stock experiencing a notable increase of up to 6.8% in a single day [1]. Group 1: Stock Performance - Palantir's stock had previously surged by as much as 1,250% over the last two years, reaching a peak last month, but has since declined by as much as 32% [2]. - The stock rebounded significantly, climbing 6% on a particular day, indicating renewed investor interest [1]. Group 2: Analyst Insights - Analyst Louie DiPalma from William Blair upgraded Palantir's stock from underperform to market perform, citing a significant sell-off driven by government efficiency concerns, which saw the stock drop from 84 [3]. - Despite acknowledging potential downside risks of over 40% due to government contract delays, DiPalma highlighted positive developments such as robust revenue growth and increasing operating margins, which he claims are the highest in the software sector [4]. - DiPalma admitted to underestimating Palantir's operating leverage and its ability to grow with minimal hiring [4]. Group 3: Valuation Metrics - Palantir's stock is currently trading at 160 times forward earnings and 56 times forward sales, indicating it is not cheap; however, its forward price/earnings-to-growth (PEG) ratio has recently declined to 0.8, suggesting it may be fairly valued [5]. - Given the recent stock decline and strong growth potential, there may be an opportunity for investors to consider Palantir [5].