Should Palantir Stock Be in Your Portfolio Before Q2 Earnings?

Core Viewpoint - Palantir Technologies Inc. is expected to report strong year-over-year growth in earnings and revenues for Q2 2025, but its current stock valuation appears high compared to industry peers [1][5][11]. Financial Performance - The Zacks Consensus Estimate for Q2 2025 earnings is 14 cents, reflecting a 55.6% increase from the same quarter last year [1]. - Total revenue is estimated at $938.3 million, indicating a 38.4% year-over-year growth [1]. - Government segment revenues are projected at $510.5 million, up 37.7% year-over-year, while Commercial segment revenues are expected to reach $429.3 million, reflecting a 39.7% increase [8]. Earnings Surprise History - Palantir has a strong history of earnings surprises, exceeding the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 12.7% [2][3]. Valuation Concerns - Palantir's stock has surged 107% year-to-date, significantly outperforming the industry average growth of 18% [9]. - The company's current valuation metrics are concerning, with a forward 12-month Price/Earnings ratio of 234.86X and an EV-to-EBITDA ratio of 2103.6X, both substantially higher than industry averages [10][11]. Market Sentiment - Despite strong business performance in both Government and Commercial segments, there is cautious sentiment among analysts regarding Palantir's high valuation and potential for a pullback if earnings expectations are not met [11].