Palantir Technologies Inc.PLTRNYSE

Overview Intelligence Charts News Fundamentals

DCF Valuation

DCF Valuation Summary

Strong Sell

Fair Value: $106.98 per share(market-calibrated)

-27.1%

Upside to Fair Value

Current

$146.82

Pure Model

$102.48

Fair Value

$106.98

Bull Case

$222.62

Bear Case

$42.97

Market Reality Check

Model Terminal Growth

3.75%

Market-Implied Growth

8.82%

Calibrated Growth

5.02%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $102.48.

What's Driving This Ratingfor PLTR

✓

CapEx already efficient

CapEx at 0.51% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 21.66% — below the sector mature average of 31.59%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $29.4B (23.91% margin).

↑

Strong near-term revenue growth

Analyst consensus projects 60.77% revenue growth in Year 1, fading to 50.34% by Year 5 and 3.75% by Year 10. Revenue reaches $123.1B by Year 10 (vs $4.5B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $68.73/share (12.5x terminal FCF) while exit multiple gives $136.22/share (30.6x terminal FCF). The 28x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 3.75% growth is more conservative. The base case averages both methods.

🎯

Market pricing in higher long-term growth

To justify $146.82, the market implies 8.82% perpetual growth — 507bps above the model's 3.75%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 91.55% indicates efficient cash generation. FCF reaches $27.6B by Year 10 (22.41% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.69

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)12.09%

Cost of Debt

Pre-tax Cost of Debt0.54%

Tax Rate5.00%

After-tax Cost of Debt0.51%

Equity Weight (E/V)99.88%

Debt Weight (D/V)0.12%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (99.88% × 12.09%) + (0.12% × 0.51%)

= 12.08%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$7.2B	$14.9B	$46.2B	$85.8B	$123.1B
EBIT	$1.6B	$3.2B	$10.0B	$19.6B	$29.4B
Tax	$78M	$162M	$500M	$980M	$1.5B
NOPAT	$1.5B	$3.1B	$9.5B	$18.6B	$28.0B
+ Depreciation	$41M	$86M	$265M	$492M	$707M
- Capex	$37M	$76M	$236M	$438M	$629M
- Δ NWC	$272M	$460M	$1.5B	$2.1B	$445M
Free Cash Flow	$1.2B	$2.6B	$8.0B	$16.6B	$27.6B
Discount Factor	0.892	0.710	0.565	0.450	0.320
Present Value	$1.1B	$1.9B	$4.5B	$7.5B	$8.8B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$27.6B

Terminal Growth Rate3.75%

WACC12.08%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$343.8B

PV of Terminal Value$109.9B

Exit Multiple Method

Year 10 EBITDA$30.1B

Exit Multiple (EV/EBITDA)28.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$844.0B

PV of Terminal Value$269.9B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$51.9B

PV of Terminal Value$109.9B

Enterprise Value$161.9B

(-) Net Debt-$1.0B

Equity Value$162.9B

Shares Outstanding2.4B

Price per Share$68.73

Exit Multiple Method

PV of Projected FCFs$51.9B

PV of Terminal Value$269.9B

Enterprise Value$321.8B

(-) Net Debt-$1.0B

Equity Value$322.8B

Shares Outstanding2.4B

Price per Share$136.22

Pure Model Fair Value

$102.48

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.75%	3.25%	3.75%	4.25%	4.75%
10.08%	$124.81	$127.26	$130.10	$133.42	$137.38
11.08%	$111.20	$112.94	$114.91	$117.17	$119.79
12.08%	$99.79	$101.06	$102.48	$104.08	$105.90
13.08%	$90.05	$90.99	$92.05	$93.22	$94.53
14.08%	$81.61	$82.34	$83.13	$84.01	$84.98

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$42.97

-70.7% vs current

• -25% vs analyst consensus
• Terminal growth: 3.3%
• Beta: 2.11

Base Case

$102.48

-30.2% vs current

• Analyst consensus
• Terminal growth: 3.8%
• Beta: 1.69

Bull Case

$222.62

51.6% vs current

• +25% vs analyst consensus
• Terminal growth: 4.3%
• Beta: 1.43

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Technology Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth60.77%

Year 3 Revenue Growth44.49%

Year 5 Revenue Growth50.34%

Year 7 Revenue Growth31.70%

Year 10 Revenue Growth3.75%

Terminal Growth Rate3.75%

Margin & Efficiency

Current EBIT Margin21.66%

Terminal EBIT Margin31.59%

Tax Rate5.00%

Historical Capex / Rev0.51%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 28x EV/EBITDA (Technology sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

Explore More

S&P 500 Screener

Filter and sort all 500 stocks

Market Movers

Today's biggest gainers and losers

Market Heatmap

Visual sector performance