Palantir (NASDAQ:PLTR) stock has a problem: it just can’t seem to satisfy a hungry market. The company delivers incredible results, and yet its share price still sinks. But can you really blame investors? After all, PLTR stock has already surged 1,680% over the past three years.
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Last week offered another reminder. Palantir unveiled its Q1 2026 results, and the numbers were a doozy. Revenue climbed 85% year-over-year to $1.633 billion, marking the fastest growth rate in company history. Profitability was just as impressive, with adjusted income from operations reaching $984 million and translating into a massive 60% margin. Combined with that blistering revenue growth, Palantir posted a Rule of 40 score of 145% – a figure CEO Alex Karp celebrated by declaring, “We have shattered the metric.”
Moreover, management made it clear the momentum is not slowing down anytime soon. Palantir raised its outlook for revenue, adjusted income from operations, and adjusted free cash flow for the remainder of 2026.
And yet, the company’s share price has dropped ~6% in the days since its earnings report hit the wires, continuing a downward trend for PLTR, which is now down 22% year-to-date.
One investor, known by the pseudonym CAN Analyst, argues the quarter simply failed to clear the market’s towering expectations.
“The results were actually good, but they were not good enough for the current share price,” the investor explained. “Shares fell, signaling overvaluation and excessive expectations.”
While some investors might wish to overlook valuation for a growing company, CAN Analyst points out that this just isn’t in the cards. The investor acknowledges that all things being equal, Palantir’s strong quarter would normally elicit plenty of interest from the market.
Clearly, that didn’t happen this time around. CAN Analyst explains that a “sell the news” mentality tends to be more commonplace when stocks enter into “overvalued” territory.
“I believe we should now focus less on the results but more on stock reaction,” adds the investor.
Moreover, the investor believes that the conditions are ripe for further losses along the way. Using “optimistic” figures of 30% CAGR over the next five years, along with a Free Cash Flow margin of 48%, CAN Analyst still calculates a downside of 58% for PLTR’s share price.
“I do not see good risk to reward here,” concludes CAN Analyst, who rates PLTR shares a Sell. (To watch CAN Analyst’s track record, click here)
Wall Street, on the other hand, has taken a bullish turn over the past few months. With 13 Buys, 4 Holds, and 2 Sells, PLTR enjoys a Moderate Buy consensus rating. Its 12-month average price target of $187.56 points to gains of 36%. (See PLTR stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.