Palantir: Expectations Are Finally Getting Priced In

Seeking Alpha12-18 13:44

SummaryDespite positive fundamental developments such as a $38 million deal win and qualifications to do work with more sensitive government data, there are no consensus EPS estimate upgrades.Palantir...

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NZTrader
12-18 15:39
NZTrader
Come back next week and see..😎

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But I think the trade opportunity for this has already played out since PLTR initially switched from a NYSE to Nasdaq listing.PLTR's recent price appreciation is led more by multiple expansion than earnings growth expectations, which have remained flat.Relative technicals are at a key resistance level albeit without any slowdown of bullish momentum.Overall, I believe PLTR stock's expectations are finally getting priced in. Missing out on a positive revenue guidance surprise in the next quarter is a key risk to my 'Neutral/Hold' view.House Lawmakers Work Towards Electing New Speaker On Capitol HillJoe RaedlePerformance AssessmentAfter a small period of bearishness, I turned into a Palantir (NASDAQ:PLTR) bull earlier in August this year. Since my last update on the stock, Palantir has continued its impressive run, handily outperforming the S&P 500 (SPY) (SPX) (IVV) (VOO):Performance since Author's Last Article on PalantirPerformance since Author's Last Article on Palantir (Seeking Alpha, Author's Last Article on Palantir)ThesisRecent developments have led me to believe the expectations in PLTR stock are finally getting priced in to a more full extent:Despite positive fundamental developments, there are no EPS estimate upgradesThe Nasdaq inclusion trade has already played outRecent price appreciation is led more by multiple expansion than earnings growthRelative technicals are at a key resistance level but without any slowdown of bullish momentumRevenue guidance beats are a key upside riskDespite positive fundamental developments, there are no EPS estimate upgradesOver the past few weeks, Palantir has seen some positive developments. For example, it recently signed a deal worth $38.3 million of 1-year revenues with the US Special Operations Command. PLTR stock popped up 7% following the news. The momentum with Government business continued as Palantir was granted the FedRAMP High Baseline Authorization, which:embodies the highest level of security within the FedRAMP program, meticulously designed to address the unique needs of highly sensitive and classified government data stored in cloud environments- FedRAMP DefinitionThis is significant as it proves that Palantir has won the trust and reliability to get deeper into the sensitive IT ecosystems of governments to deliver value; naturally a highly exclusive opportunity.However, despite these instances of progress, the normalized EPS estimates for the next 4 quarters have hardly moved over the last month:Normalized EPS Revisions by Wall St AnalystsNormalized EPS Revisions by Wall St Analysts (Capital IQ, Author's Analysis)This indicates to me that the positive fundamentals are starting to get fully priced in.The Nasdaq inclusion trade has already played outOn 14 Nov 2024, Palantir announced that it was switching its stock exchange listing from NYSE to the Nasdaq in the hopes of meeting the criteria to make it into the coveted Nasdaq 100 (QQQ) index. Following this, I believe the market saw a Nasdaq inclusion trade theme on Palantir, fueling an almost 25% rally until 13 Dec 2024, when Nasdaq (NDAQ) announced that PLTR would be included in its flagship index:PLTR Rally After First Sign of Potential Nasdaq InclusionPLTR Rally After First Sign of Potential Nasdaq Inclusion (TradingView, Author's Analysis)I think it is too late to bet on the Nasdaq inclusion catalyst now, since that has already materialized or been confirmed. Typically, the opportunity for alpha exists in the anticipation of a catalyst playing out; which I suspect is the case here during 15 Nov 2024 to 13 Dec 2024.Recent price appreciation is led more by multiple expansion than earnings growthPalantir's market capitalization and share price appreciation (orange line) seems to be fueled primarily by an expansion in the 1-yr fwd PE multiple (steep rise in blue line) since the earnings growth index (grey line) has remained flat so far:1-yr fwd PE Drivers1-yr fwd PE Drivers (Capital IQ, Author's Analysis)This makes me believe the market sentiment on PLTR is chasing hype more than EPS growth, which, I believe, is more likely to be unsustainable.Relative technicals are at a key resistance level but without any slowdown of bullish momentumIf this is your first time reading a Hunting Alpha article using Technical Analysis, you may want to read this post, which explains how and why I read the charts the way I do. All my charts reflect total shareholder return as they are adjusted for dividends/distributions.Relative Read of PLTR vs SPX500PLTR vs SPX500 Technical AnalysisPLTR vs SPX500 Technical Analysis (TradingView, Author's Analysis)Relative to the S&P 500, PLTR is at a key resistance level. However, there are no signs of slowdown by the buyers just yet. Still, I believe continuing fresh buys at this critical juncture is more risky.Revenue guidance beats are a key upside riskI believe the biggest risk to my thesis that expectations are getting priced in is Palantir's track record of positive revenue guidance beats vs consensus expectations:Revenue Guidance Surprise vs ConsensusRevenue Guidance Surprise vs Consensus (Capital IQ, Author's Analysis)Currently, PLTR's Q1 FY25 revenue estimates stand at $796.66 million. So seeing how the Q1 FY25's guidance pans out next quarter would be a key upside risk monitorable.Takeaway & PositioningMy bullish views on Palantir have played out very well over the past few months. But now, I am starting to get the sense that expectations are finally starting to get fully priced into PLTR stock. This is because despite positive updates such as a massive $38 million in 1 years' revenue deal win and progress in getting deeper into governments' IT ecosystems, the consensus normalized EPS upgrades have barely moved an inch toward the upside over the last month. I also think the Nasdaq index inclusion catalyst has already played out, as the stock has rallied 25% since Palantir first gave investors a clue about potentially joining the Nasdaq 100 by switching its stock exchange listing from NYSE to the Nasdaq.From a valuation drivers perspective, it is clear that the recent run-up in the stock price is driven mostly by multiple expansion, since EPS estimates have remained flat. Technically relative to the S&P 500, whilst PLTR stock is still showing strong bullish momentum, it is at a key resistance level, which increases the chances of a pause or a correction.Hence, I am changing my stance to a 'Neutral/Hold'. In doing so, I would have to accept the risk of a revenue guidance surprise in the next quarter, leading to a gap up reaction in the stock.","kind":"news","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":383023110373592,"gmtCreate":1734507569237,"gmtModify":1734508553752,"author":{"id":"4178467621785122","authorId":"4178467621785122","name":"NZTrader","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"4178467621785122","authorIdStr":"4178467621785122"},"htmlText":"Come back next week and see..😎","listText":"Come back next week and see..😎","text":"Come back next week and see..😎","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/383023110373592","repostId":1126764279,"repostType":2,"repost":{"id":"1126764279","kind":"news","pubTimestamp":1734500670,"share":"https://ttm.financial/m/news/1126764279?lang=&edition=fundamental","pubTime":"2024-12-18 13:44","market":"us","language":"en","title":"Palantir: Expectations Are Finally Getting Priced In","url":"https://stock-news.laohu8.com/highlight/detail?id=1126764279","media":"Seeking Alpha","summary":"SummaryDespite positive fundamental developments such as a $38 million deal win and qualifications to do work with more sensitive government data, there are no consensus EPS estimate upgrades.Palantir","content":"<html><head></head><body><h2 id=\"id_1503813011\">Summary</h2><ul style=\"\"><li><p>Despite positive fundamental developments such as a $38 million deal win and qualifications to do work with more sensitive government data, there are no consensus EPS estimate upgrades.</p></li><li><p>Palantir will be joining the Nasdaq 100 index. But I think the trade opportunity for this has already played out since PLTR initially switched from a NYSE to Nasdaq listing.</p></li><li><p>PLTR&#39;s recent price appreciation is led more by multiple expansion than earnings growth expectations, which have remained flat.</p></li><li><p>Relative technicals are at a key resistance level albeit without any slowdown of bullish momentum.</p></li><li><p>Overall, I believe PLTR stock&#39;s expectations are finally getting priced in. Missing out on a positive revenue guidance surprise in the next quarter is a key risk to my &#39;Neutral/Hold&#39; view.</p></li></ul><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/70e75c4d5d88f0e3b756aca3bc52de7e\" alt=\"House Lawmakers Work Towards Electing New Speaker On Capitol Hill\" title=\"House Lawmakers Work Towards Electing New Speaker On Capitol Hill\" tg-width=\"750\" tg-height=\"501\"/><span>House Lawmakers Work Towards Electing New Speaker On Capitol Hill</span></p><p></p><p><strong>Joe Raedle</strong></p><p></p><h2 id=\"id_805110764\">Performance Assessment</h2><p>After a small period of bearishness, I turned into a Palantir (NASDAQ:PLTR) bull earlier in August this year. Since my last update on the stock, Palantir has continued its impressive run, handily outperforming the S&amp;P 500 (SPY) (SPX) (IVV) (VOO):</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6aaee9572553c70c230674dc559fe25a\" alt=\"Performance since Author&#39;s Last Article on Palantir\" title=\"Performance since Author&#39;s Last Article on Palantir\" tg-width=\"299\" tg-height=\"466\"/><span>Performance since Author&#39;s Last Article on Palantir</span></p><p style=\"text-align: left;\"><strong>Performance since Author&#39;s Last Article on Palantir (Seeking Alpha, Author&#39;s Last Article on Palantir)</strong></p><p></p><h2 id=\"id_900613767\">Thesis</h2><p>Recent developments have led me to believe the expectations in PLTR stock are finally getting priced in to a more full extent:</p><ol start=\"1\" style=\"\"><li><p>Despite positive fundamental developments, there are no EPS estimate upgrades</p></li><li><p>The Nasdaq inclusion trade has already played out</p></li><li><p>Recent price appreciation is led more by multiple expansion than earnings growth</p></li><li><p>Relative technicals are at a key resistance level but without any slowdown of bullish momentum</p></li><li><p>Revenue guidance beats are a key upside risk</p></li></ol><h2 id=\"id_2318564640\">Despite positive fundamental developments, there are no EPS estimate upgrades</h2><p>Over the past few weeks, Palantir has seen some positive developments. For example, it recently signed a deal worth $38.3 million of 1-year revenues with the US Special Operations Command. PLTR stock popped up 7% following the news. The momentum with Government business continued as Palantir was granted the FedRAMP High Baseline Authorization, which:</p><blockquote><p></p><p>embodies the highest level of security within the FedRAMP program, meticulously designed to address the unique needs of highly sensitive and classified government data stored in cloud environments</p><p>- FedRAMP Definition</p></blockquote><p>This is significant as it proves that Palantir has won the trust and reliability to get deeper into the sensitive IT ecosystems of governments to deliver value; naturally a highly exclusive opportunity.</p><p>However, despite these instances of progress, the normalized EPS estimates for the next 4 quarters have hardly moved over the last month:</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/2e8847a79fb999b573d93008732621c7\" alt=\"Normalized EPS Revisions by Wall St Analysts\" title=\"Normalized EPS Revisions by Wall St Analysts\" tg-width=\"550\" tg-height=\"141\"/><span>Normalized EPS Revisions by Wall St Analysts</span></p><p style=\"text-align: left;\"><strong>Normalized EPS Revisions by Wall St Analysts (Capital IQ, Author&#39;s Analysis)</strong></p><p></p><p>This indicates to me that the positive fundamentals are starting to get fully priced in.</p><h2 id=\"id_1638019004\">The Nasdaq inclusion trade has already played out</h2><p>On 14 Nov 2024, Palantir announced that it was switching its stock exchange listing from NYSE to the Nasdaq in the hopes of meeting the criteria to make it into the coveted Nasdaq 100 (QQQ) index. Following this, I believe the market saw a Nasdaq inclusion trade theme on Palantir, fueling an almost 25% rally until 13 Dec 2024, when Nasdaq (NDAQ) announced that PLTR would be included in its flagship index:</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/63c55e76595e815eb3208fb656bc7571\" alt=\"PLTR Rally After First Sign of Potential Nasdaq Inclusion\" title=\"PLTR Rally After First Sign of Potential Nasdaq Inclusion\" tg-width=\"640\" tg-height=\"391\"/><span>PLTR Rally After First Sign of Potential Nasdaq Inclusion</span></p><p style=\"text-align: left;\"><strong>PLTR Rally After First Sign of Potential Nasdaq Inclusion (TradingView, Author&#39;s Analysis)</strong></p><p></p><p>I think it is too late to bet on the Nasdaq inclusion catalyst now, since that has already materialized or been confirmed. Typically, the opportunity for alpha exists in the anticipation of a catalyst playing out; which I suspect is the case here during 15 Nov 2024 to 13 Dec 2024.</p><h2 id=\"id_1656098577\">Recent price appreciation is led more by multiple expansion than earnings growth</h2><p>Palantir&#39;s market capitalization and share price appreciation (orange line) seems to be fueled primarily by an expansion in the 1-yr fwd PE multiple (steep rise in blue line) since the earnings growth index (grey line) has remained flat so far:</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/407dbd03efbbe73aef18c454d7a27890\" alt=\"1-yr fwd PE Drivers\" title=\"1-yr fwd PE Drivers\" tg-width=\"640\" tg-height=\"470\"/><span>1-yr fwd PE Drivers</span></p><p style=\"text-align: left;\"><strong>1-yr fwd PE Drivers (Capital IQ, Author&#39;s Analysis)</strong></p><p></p><p>This makes me believe the market sentiment on PLTR is chasing hype more than EPS growth, which, I believe, is more likely to be unsustainable.</p><h2 id=\"id_695766100\">Relative technicals are at a key resistance level but without any slowdown of bullish momentum</h2><p><em>If this is your first time reading a Hunting Alpha article using Technical Analysis, you may want to read this post, which explains how and why I read the charts the way I do. All my charts reflect total shareholder return as they are adjusted for dividends/distributions.</em></p><h3 id=\"id_858659057\">Relative Read of PLTR vs SPX500</h3><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a615f22b390f7260c48b9c53cde4edb4\" alt=\"PLTR vs SPX500 Technical Analysis\" title=\"PLTR vs SPX500 Technical Analysis\" tg-width=\"640\" tg-height=\"390\"/><span>PLTR vs SPX500 Technical Analysis</span></p><p style=\"text-align: left;\"><strong>PLTR vs SPX500 Technical Analysis (TradingView, Author&#39;s Analysis)</strong></p><p></p><p>Relative to the S&amp;P 500, PLTR is at a key resistance level. However, there are no signs of slowdown by the buyers just yet. Still, I believe continuing fresh buys at this critical juncture is more risky.</p><h2 id=\"id_2666522888\">Revenue guidance beats are a key upside risk</h2><p>I believe the biggest risk to my thesis that expectations are getting priced in is Palantir&#39;s track record of positive revenue guidance beats vs consensus expectations:</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/41ece2eccf6d9bfee4046dfdc548a6fc\" alt=\"Revenue Guidance Surprise vs Consensus\" title=\"Revenue Guidance Surprise vs Consensus\" tg-width=\"640\" tg-height=\"468\"/><span>Revenue Guidance Surprise vs Consensus</span></p><p style=\"text-align: left;\"><strong>Revenue Guidance Surprise vs Consensus (Capital IQ, Author&#39;s Analysis)</strong></p><p></p><p>Currently, PLTR&#39;s Q1 FY25 revenue estimates stand at $796.66 million. So seeing how the Q1 FY25&#39;s guidance pans out next quarter would be a key upside risk monitorable.</p><h2 id=\"id_824056633\">Takeaway &amp; Positioning</h2><p>My bullish views on Palantir have played out very well over the past few months. But now, I am starting to get the sense that expectations are finally starting to get fully priced into PLTR stock. This is because despite positive updates such as a massive $38 million in 1 years&#39; revenue deal win and progress in getting deeper into governments&#39; IT ecosystems, the consensus normalized EPS upgrades have barely moved an inch toward the upside over the last month. I also think the Nasdaq index inclusion catalyst has already played out, as the stock has rallied 25% since Palantir first gave investors a clue about potentially joining the Nasdaq 100 by switching its stock exchange listing from NYSE to the Nasdaq.</p><p>From a valuation drivers perspective, it is clear that the recent run-up in the stock price is driven mostly by multiple expansion, since EPS estimates have remained flat. Technically relative to the S&amp;P 500, whilst PLTR stock is still showing strong bullish momentum, it is at a key resistance level, which increases the chances of a pause or a correction.</p><p>Hence, I am <strong>changing my stance to a &#39;Neutral/Hold&#39;</strong>. In doing so, I would have to accept the risk of a revenue guidance surprise in the next quarter, leading to a gap up reaction in the stock.</p></body></html>","source":"lsy1728464409321","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Palantir: Expectations Are Finally Getting Priced In</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPalantir: Expectations Are Finally Getting Priced In\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-12-18 13:44 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4744809-palantir-expectations-are-finally-getting-priced-in><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryDespite positive fundamental developments such as a $38 million deal win and qualifications to do work with more sensitive government data, there are no consensus EPS estimate upgrades.Palantir...</p>\n\n<a href=\"https://seekingalpha.com/article/4744809-palantir-expectations-are-finally-getting-priced-in\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"PLTR":"Palantir Technologies Inc."},"source_url":"https://seekingalpha.com/article/4744809-palantir-expectations-are-finally-getting-priced-in","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1126764279","content_text":"SummaryDespite positive fundamental developments such as a $38 million deal win and qualifications to do work with more sensitive government data, there are no consensus EPS estimate upgrades.Palantir will be joining the Nasdaq 100 index. But I think the trade opportunity for this has already played out since PLTR initially switched from a NYSE to Nasdaq listing.PLTR's recent price appreciation is led more by multiple expansion than earnings growth expectations, which have remained flat.Relative technicals are at a key resistance level albeit without any slowdown of bullish momentum.Overall, I believe PLTR stock's expectations are finally getting priced in. Missing out on a positive revenue guidance surprise in the next quarter is a key risk to my 'Neutral/Hold' view.House Lawmakers Work Towards Electing New Speaker On Capitol HillJoe RaedlePerformance AssessmentAfter a small period of bearishness, I turned into a Palantir (NASDAQ:PLTR) bull earlier in August this year. Since my last update on the stock, Palantir has continued its impressive run, handily outperforming the S&P 500 (SPY) (SPX) (IVV) (VOO):Performance since Author's Last Article on PalantirPerformance since Author's Last Article on Palantir (Seeking Alpha, Author's Last Article on Palantir)ThesisRecent developments have led me to believe the expectations in PLTR stock are finally getting priced in to a more full extent:Despite positive fundamental developments, there are no EPS estimate upgradesThe Nasdaq inclusion trade has already played outRecent price appreciation is led more by multiple expansion than earnings growthRelative technicals are at a key resistance level but without any slowdown of bullish momentumRevenue guidance beats are a key upside riskDespite positive fundamental developments, there are no EPS estimate upgradesOver the past few weeks, Palantir has seen some positive developments. For example, it recently signed a deal worth $38.3 million of 1-year revenues with the US Special Operations Command. PLTR stock popped up 7% following the news. The momentum with Government business continued as Palantir was granted the FedRAMP High Baseline Authorization, which:embodies the highest level of security within the FedRAMP program, meticulously designed to address the unique needs of highly sensitive and classified government data stored in cloud environments- FedRAMP DefinitionThis is significant as it proves that Palantir has won the trust and reliability to get deeper into the sensitive IT ecosystems of governments to deliver value; naturally a highly exclusive opportunity.However, despite these instances of progress, the normalized EPS estimates for the next 4 quarters have hardly moved over the last month:Normalized EPS Revisions by Wall St AnalystsNormalized EPS Revisions by Wall St Analysts (Capital IQ, Author's Analysis)This indicates to me that the positive fundamentals are starting to get fully priced in.The Nasdaq inclusion trade has already played outOn 14 Nov 2024, Palantir announced that it was switching its stock exchange listing from NYSE to the Nasdaq in the hopes of meeting the criteria to make it into the coveted Nasdaq 100 (QQQ) index. Following this, I believe the market saw a Nasdaq inclusion trade theme on Palantir, fueling an almost 25% rally until 13 Dec 2024, when Nasdaq (NDAQ) announced that PLTR would be included in its flagship index:PLTR Rally After First Sign of Potential Nasdaq InclusionPLTR Rally After First Sign of Potential Nasdaq Inclusion (TradingView, Author's Analysis)I think it is too late to bet on the Nasdaq inclusion catalyst now, since that has already materialized or been confirmed. Typically, the opportunity for alpha exists in the anticipation of a catalyst playing out; which I suspect is the case here during 15 Nov 2024 to 13 Dec 2024.Recent price appreciation is led more by multiple expansion than earnings growthPalantir's market capitalization and share price appreciation (orange line) seems to be fueled primarily by an expansion in the 1-yr fwd PE multiple (steep rise in blue line) since the earnings growth index (grey line) has remained flat so far:1-yr fwd PE Drivers1-yr fwd PE Drivers (Capital IQ, Author's Analysis)This makes me believe the market sentiment on PLTR is chasing hype more than EPS growth, which, I believe, is more likely to be unsustainable.Relative technicals are at a key resistance level but without any slowdown of bullish momentumIf this is your first time reading a Hunting Alpha article using Technical Analysis, you may want to read this post, which explains how and why I read the charts the way I do. All my charts reflect total shareholder return as they are adjusted for dividends/distributions.Relative Read of PLTR vs SPX500PLTR vs SPX500 Technical AnalysisPLTR vs SPX500 Technical Analysis (TradingView, Author's Analysis)Relative to the S&P 500, PLTR is at a key resistance level. However, there are no signs of slowdown by the buyers just yet. Still, I believe continuing fresh buys at this critical juncture is more risky.Revenue guidance beats are a key upside riskI believe the biggest risk to my thesis that expectations are getting priced in is Palantir's track record of positive revenue guidance beats vs consensus expectations:Revenue Guidance Surprise vs ConsensusRevenue Guidance Surprise vs Consensus (Capital IQ, Author's Analysis)Currently, PLTR's Q1 FY25 revenue estimates stand at $796.66 million. So seeing how the Q1 FY25's guidance pans out next quarter would be a key upside risk monitorable.Takeaway & PositioningMy bullish views on Palantir have played out very well over the past few months. But now, I am starting to get the sense that expectations are finally starting to get fully priced into PLTR stock. This is because despite positive updates such as a massive $38 million in 1 years' revenue deal win and progress in getting deeper into governments' IT ecosystems, the consensus normalized EPS upgrades have barely moved an inch toward the upside over the last month. I also think the Nasdaq index inclusion catalyst has already played out, as the stock has rallied 25% since Palantir first gave investors a clue about potentially joining the Nasdaq 100 by switching its stock exchange listing from NYSE to the Nasdaq.From a valuation drivers perspective, it is clear that the recent run-up in the stock price is driven mostly by multiple expansion, since EPS estimates have remained flat. Technically relative to the S&P 500, whilst PLTR stock is still showing strong bullish momentum, it is at a key resistance level, which increases the chances of a pause or a correction.Hence, I am changing my stance to a 'Neutral/Hold'. In doing so, I would have to accept the risk of a revenue guidance surprise in the next quarter, leading to a gap up reaction in the stock.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":7,"commentSize":1,"repostSize":1,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1126764279"}