Shares of Palantir (PLTR) dropped over 9% on Tuesday due to a critical report from short-selling firm Citron Research, which cited that PLTR stock is significantly overvalued. This comes a week after the firm’s Andrew Left said that the company’s valuation ratios are “absurd.”
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Citron Says PLTR Is Overpriced Compared to OpenAI
Citron’s latest report used the $500 billion valuation of OpenAI, a leader in the AI space, as a point of comparison to show that Palantir’s stock price may be too high.
The short-selling firm noted that OpenAI’s valuation translates to a price-to-sales (P/S) ratio of nearly 17x. Meanwhile, Citron estimates Palantir’s 2026 revenue at $29.6 billion.
By applying OpenAI’s P/S ratio to PLTR’s projected revenue, the firm calculated an implied Palantir stock price of about $40 per share, much lower than its current $162.
Overall, Left’s firm concluded that Palantir does not belong in the same valuation league as OpenAI, given the latter’s “unprecedented scale” and rapid growth. This implies that even at a hypothetical $40 per share, Palantir would still be considered an expensive stock.
TipRanks AI Analyst Impressed with PLTR
According to TipRanks AI Stock Analysis, Palantir stock has received a score of 75 out of 100 with an Outperform rating. Also, the AI analyst has set a price target of $196 on PLTR, which implies an upside of over 24%.
PLTR’s stock score reflects strong financial performance and positive earnings call sentiment. However, its high valuation and significant volatility are key risks for investors.
Is PLTR a Good Stock to Buy Now?
Turning to Wall Street, PLTR stock has a Hold rating, based on five Buys, 13 Holds, and two Sells assigned in the last three months. The average Palantir stock price target is $156.78, which implies a downside of 0.85% from current levels.
