DCF Studio

    PLTR · NMS · Technology

    Palantir Technologies Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 6.93

    Market price

    USD 177.64

    Implied upside

    -96.1%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Wrong toolThis model values the shares at 3.9% of the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.
    AdjustedReported capital expenditure averages just 0.99% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.09% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Current EV/EBITDA of 291.6x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 6.93-96.1%
    Exit multiple
    USD 12.96-92.7%
    Market price
    USD 177.64

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 5.9bnUSD 7.9bnUSD 10.5bnUSD 14.0bnUSD 18.6bn+32.9%
    EBITUSD 585.4mUSD 778.0mUSD 1.0bnUSD 1.4bnUSD 1.8bn+32.9%
    NOPATUSD 559.9mUSD 744.2mUSD 989.2mUSD 1.3bnUSD 1.7bn+32.9%
    Add depreciation & amortisationUSD 64.9mUSD 86.3mUSD 114.7mUSD 152.5mUSD 202.7m+32.9%
    Less capital expenditureUSD -64.9mUSD -86.3mUSD -114.7mUSD -152.5mUSD -202.7m+32.9%
    Less increase in working capitalUSD -161.2mUSD -214.3mUSD -284.8mUSD -378.6mUSD -503.2m+32.9%
    Free cashflow to firmUSD 398.7mUSD 529.9mUSD 704.4mUSD 936.2mUSD 1.2bn+32.9%
    Discount factor0.94160.83490.74030.65640.5820-
    Present valueUSD 375.4mUSD 442.4mUSD 521.4mUSD 614.5mUSD 724.2m+17.9%
    Present Value Of The ForecastUSD 2.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.416Reported 1.621, pulled toward 1.0 (Blume)
    Cost of equity12.79%Risk-free + beta x equity risk premium
    Cost of debt7.00%Assumed: risk-free + 2bp (interest expense not reported)
    Market capitalisationUSD 426.9bn99.9% of capital
    Total debtUSD 229.3m0.1% of capital, book value as a proxy
    Tax rate4.3%Effective, capped at statutory
    WACC12.78%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 6.93

    75% of EV

    Forecast FCFF, final year
    USD 1.2bn
    Capex at depreciation, working capital in reinvestment
    USD 1.7bn
    Less reinvestment at g/ROIC (19.6% of NOPAT)
    USD -341.8m
    Capitalised
    USD 1.4bn
    ROIC (WACC floor)
    12.8%
    Terminal value, undiscounted
    USD 14.0bn
    Terminal value, discounted
    USD 8.2bn
    Enterprise value
    USD 10.8bn
    Less net debt
    USD -6.9bn
    Equity value
    USD 17.8bn

    Exit at 20.0x EBITDA

    Value per shareUSD 12.96

    90% of EV

    Terminal value, undiscounted
    USD 40.6bn
    Terminal value, discounted
    USD 23.6bn
    Enterprise value
    USD 26.3bn
    Less net debt
    USD -6.9bn
    Equity value
    USD 33.3bn

    Spread between methods: 61%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    10.78%7.857.877.897.917.93
    11.78%7.337.357.377.397.40
    12.78%6.906.926.936.956.96
    13.78%6.536.556.566.576.59
    14.78%6.226.236.246.256.27

    Outlined: this model. Green text: above today's price of 177.64. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Discount rate12.8%2.7%-10.1pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.