How to Make a 4.2% Yield By Shorting Palantir Put Options Over the Next Month

Core Viewpoint - A cash-secured short-put option strategy in Palantir Inc. (PLTR) is projected to yield over 4.2% in the next month, with a strike price set 10% below the recent closing price of $178.15, which is 23% below the new price target of $219 per share [1][3]. Financial Performance - PLTR's stock closed at $178.15 on October 17, 2025, recovering from a low of $153.11 on September 5, but still below its peak of $186.97 on August 12 [1]. - Analysts forecast revenue for the next year to be $5.62 billion, representing a growth of over 35% from the previous forecast of $4.16 billion for 2025 [4]. - The adjusted free cash flow (FCF) margin for Q2 was reported at 57% of sales, translating to $569 million from $1,004 million in sales, compared to 42% in Q1 and an average of 54.9% over the trailing 12 months [4]. Valuation Metrics - Assuming a conservative FCF margin of 50% for the next 12 months, the adjusted FCF is estimated to be $2.81 billion [5]. - Using a lower FCF multiple of 185x, the market cap is projected to be $519.95 billion, which is 22.9% higher than the current market cap of $423 billion [6]. - This valuation suggests that PLTR stock could be worth approximately $219 per share, rounded from $218.95 [6]. Investment Strategy - Investors are advised to consider selling short out-of-the-money put options with near-term expirations to set a lower potential buy-in price while earning premium income [7].