Should Palantir Stock Be in Your Portfolio Before Q4 Earnings?

Core Insights - Palantir Technologies Inc. (PLTR) is set to report its fourth-quarter 2025 results on February 2, with earnings expected to grow by 64.3% year-over-year to 23 cents and total revenues projected at $1.35 billion, reflecting a 62.8% increase [1][6] Earnings Performance - The company has a strong history of earnings surprises, exceeding the Zacks Consensus Estimate in three of the last four quarters, with an average earnings surprise of 16.3% [2][3] Revenue Growth - The anticipated revenue growth is driven by robust demand in both government and commercial segments, with government revenues expected to reach $707.24 million (up 55.4% year-over-year) and commercial revenues projected at $646.25 million (up 73.5% year-over-year) [6][7] Stock Valuation - Palantir shares have increased by 94% over the past year but have seen a 19% decline in the last three months, indicating a recent pullback [8] - The stock is currently trading at a high valuation, with a forward Price/Earnings ratio of 147X and an EV/EBITDA of 543X, significantly above industry averages of 32X and 11X respectively [9][10] Investment Considerations - While Palantir shows strong growth momentum and profitability improvements, its current valuation reflects much of the optimism, suggesting limited near-term upside [10] - The company’s long-term prospects in artificial intelligence and data analytics remain strong, but short-term investors may consider waiting for a potential pullback before investing [10]