By coinnews 
00:00 Speaker A
Shares of Palantir plunging today, despite beating expectations in the first quarter and hiking its full year guidance. The stock’s solid quarter seemingly not enough to soothe some fears around the software giant’s lofty valuation. Palantir stock has risen more than 60% so far this year. Joining us now to dive further into the most recent quarter, we’ve got Louis Di Palma, who is the William Blair Research Industrials analyst. Louis, good to have you here with us. There’s one kind of major number that a lot of people who are lighting up the Yahoo Finance platform will see, and that’s the PE ratio around this stock, which just tells the story about how far run this valuation is still trending right now. I want to get your analysis on that compared to what we heard in the quarter.
01:14 Louis Di Palma
Yes, and thanks for having me on the show. In terms of the the valuation, um, you brought up the the PE ratio and, um, quite honestly, it’s in the the stratosphere, and investors are assuming that the company can maintain, um, 30% or 40% plus growth for the next five years, um, with that type of valuation. For some context, um, the company’s valuation trades at 64 times 2026 consensus sales. And CrowdStrike is the second highest name in all of software in terms of, um, its valuation at 18 times sales. So, Palantir theoretically could fall by 70%, and it would still be tied as the most expensive name in its entire, um, software peer group. So, um, the com the stock is not cheap by by any stretch, but you are paying for quality here as the results were pristine.
03:12 Speaker A
So, talk to me about those fundamentals. Obviously, the valuation is of concern, but I know in your notes you said that you also see revenue growth slowing in the second half of this year. You said that the numbers are pristine. Is this the last great Palantir report, at least for this year?
03:41 Louis Di Palma
No, we we think that, you know, there’s the potential for the revenue growth to decelerate, um, in the second half of the year or early 2026. However, if the revenue growth decelerates from 39% to 36%, you know, those results are still off the charts. They’re still among the best revenue growth in the entire software universe. And then if you combine it with the fact that the company, you know, achieved a 44% operating profit margin, you know, last quarter, and in all likelihood, that’s going to continue to trade higher. Um, you know, the run, you know, isn’t necessarily done. It’s just the fact that, um, since there is no valuation support, um, you know, the stock could go down while the company continues to execute in a very impressive fashion.