Should You Buy Palantir Stock Ahead of Q3 Earnings Report?

Palantir Technologies Inc. PLTR will report its third-quarter 2025 results on Nov. 3, after the bell.

The Zacks Consensus Estimate for earnings in the to-be-reported quarter stands at 17 cents, indicating 70% growth from the year-ago reported quarter. The consensus estimate for total revenues stands at $1.1 billion, indicating 50.7% year-over-year growth. There has been no change in analyst estimates or revisions lately.

The company has a strong history of earnings surprises. Earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and matched once, with an earnings surprise of 13.2%, on average.

PLTR’s Lesser Chance of Q3 Earnings Beat

Our proven model doesn’t conclusively predict an earnings beat for PLTR this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

PLTR has an Earnings ESP of -5.88% and a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank stocks here.

PLTR’s All-Round Healthy Business Should be the Driver in Q3

We expect a significant year-over-year improvement in the company’s top line in the to-be-reported quarter, driven by healthy business from existing as well as new customers, strengthening both the Government and Commercial segments.

The consensus estimate for Government revenues is pegged at $602.5 million, indicating 47.6% year-over-year growth. The consensus mark for Commercial revenues is pegged at $493.7 million, indicating 55.6% year-over-year growth.

PLTR Stock Looking Pricey

Palantir shares have surged a whopping 151% year to date. This performance has significantly outpaced the 22% growth of its industry. Interest in this prominent AI-focused stock remains strong as investors seek opportunities to capitalize on the AI trend.

At this moment, it is worth noting that, at its current valuation, Palantir appears to be looking pricey. Based on training 12-month EV-to-EBITDA, PLTR is currently trading at 1122X, way above the industry’s 15.27X. If we look at the forward 12-month Price/Earnings ratio, the company’s shares are currently trading at 229.14X forward earnings, well above the industry’s 38.98X.

Investment Considerations

Palantir has shown impressive growth momentum, backed by strong demand across both government and commercial sectors, along with consistent profitability improvements. However, the stock’s current valuation already reflects much of this optimism, leaving limited room for near-term upside. While its long-term prospects in artificial intelligence and data analytics remain compelling, short-term investors may prefer to wait for a potential pullback before adding positions. Given the combination of strong fundamentals but stretched valuation, a “Hold” stance appears prudent ahead of the third-quarter earnings report, with a focus on monitoring future contract wins and margin trends.

As PLTR’s valuation moves higher, Lockheed Martin LMT and RTX Corporation RTX offer more grounded defense exposure. Lockheed Martin, with its massive defense contracts, provides steady cash flow and less volatility than PLTR. Its forward 12-month price-to-earnings ratio is below 18X, and trailing 12-month EV-to-EBITDA is below 13X. Lockheed Martin continues to benefit from global rearmament while trading at modest earnings multiples.

Similarly, RTX shines through missile systems. RTX’s defense backlog, like LMT's, underscores its stability. Its forward 12-month price-to-earnings ratio is below 28X, and trailing 12-month EV-to-EBITDA is just below 19X.

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This article originally published on Zacks Investment Research (zacks.com).

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