Palantir’s Stock (PLTR) Underperforming Into Earnings – What To Expect

Palantir stock (NASDAQ:PLTR) has started 2026 under a bit of a cloud, down 10.8% ahead of earnings, as all eyes turn to Alex Carp and Co. With the stock price hovering around $150, up 78.5% over the past 12 months, expectations continue to remain elevated.

Expectations for the quarter of $0.23 in EPS on $1.34B revenue, creates minimal cushion for a stock that has underperformed the S&P 500 by 12 percentage points year-to-date.

Palantir enters the print having raised full-year 2025 revenue guidance three times over the prior 12 months, lifting the FY2025 midpoint from roughly $3.75B to $4.40B by the Q3 update. That pattern forced the Street to re-anchor models repeatedly, yet the stock's reaction to Q3's 23.5% EPS beat and raised outlook was muted, signaling that valuation had become the dominant constraint.

The company now trades at the third-highest P/E multiple in the S&P 500, while recent market rotation away from AI software toward hardware and chip stocks has created structural headwinds independent of fundamental execution.

What the result will determine is whether Palantir can deliver a forward guide for FY2026 that maintains the growth slope required to support the multiple. A beat on Q4 revenue paired with conservative 2026 guidance would risk re-igniting the valuation debate.

On the other hand, a guide that demonstrates sustained U.S. commercial acceleration and government demand visibility would provide the durability narrative the stock needs to stabilize.

Consensus Estimates

Consensus revenue of $1.34B sits 0.8% above management's Q4 guide midpoint of $1.33B, a tighter gap than the company faced entering Q3 when consensus was 1.8% above the guide. The Street's EPS estimate of $0.23 reflects a 63% year-over-year increase, consistent with the operating leverage narrative that has driven estimate revisions throughout 2025. Nineteen analysts raised EPS estimates in the past 30 days with zero downgrades, indicating confidence in near-term execution but also raising the bar for what constitutes a meaningful beat.

The estimate range for revenue spans $1.08B to $1.12B, an unusually wide spread that reflects divergent views on U.S. commercial growth sustainability. The low end of the range sits 18% below consensus, suggesting some analysts remain skeptical that the AI platform adoption curve can maintain its recent slope. The high end implies continued triple-digit U.S. commercial growth, the metric management has highlighted as the primary driver of upside throughout 2025.

Management Guidance and Commentary

“We are guiding Q4 revenue to 61% year-over-year growth and U.S. commercial revenue to 121% year-over-year growth, raising FY 2025 revenue guidance to 53% year-over-year growth, crushing consensus expectations.”

Management's Q3 guidance language, issued November 2, 2025, established an aggressive posture that left minimal room for upside relative to the Street's subsequent positioning. The Q4 revenue guide midpoint of $1.33B represented 61% year-over-year growth, while the U.S. commercial segment guide implied 121% growth. Both figures were framed as “crushing consensus,” yet the stock's muted reaction to the Q3 print demonstrated that investors had begun discounting strong guidance as table stakes rather than catalytic.

The full-year 2025 revenue guide of $4.396B to $4.40B, raised from the prior $4.142B to $4.15B range, marked the third upward revision of the year. This pattern of sequential guide increases created a staircase effect in consensus estimates, with each quarter's outlook becoming the new floor for forward models.

Palantir's corporate branding at their headquarters, representing a company at the center of the AI platform revolution.

Analyst Price Targets & Ratings

Wall Street maintains a bullish stance with 81% of analysts rating shares a Buy or Strong Buy. The consensus target of $189.84 implies 27% upside from current levels, though this represents a reduction from targets above $220 that were common during the stock's November peak.

Sector & Peer Comparison

Palantir trades at a 507% premium to the median forward P/E of its software infrastructure peer group, a gap that has widened from 420% in early 2025 despite the stock's recent decline. The forward P/E of 163.9x is 10.5 times higher than the next-most-expensive peer in the table, Intuit at 21.6x, and 6.1 times the multiple of Microsoft, the largest software company by market capitalization.

Earnings Track Record

Palantir has beaten or met adjusted EPS estimates in 13 of the last 14 quarters, with the sole miss occurring in Q4 2025 when the company reported in-line results but the stock sold off 7.2% on conservative guidance. The 64.3% beat rate over the past 20 quarters is respectable but not exceptional, while the 15.8% average surprise reflects consistent but modest upside to Street models.

Post-Earnings Price Movement History

Palantir's post-earnings price behavior reveals a disconnect between fundamental results and stock performance. The average next-day move of negative 1.5% masks significant volatility, with reactions ranging from a 3.4% gain following Q3 2025's strong beat to a 7.2% decline after Q4 2025's in-line result.

Expected Move & Implied Volatility

The options market is pricing a 9.0% move in either direction following the earnings announcement, implying elevated uncertainty relative to the stock's average post-earnings move. Implied volatility of 68% sits at the 72nd percentile of the past year's range, indicating heightened uncertainty relative to historical norms.

Street-level view of Palantir's headquarters, where the company will report results that could determine the sustainability of its premium valuation.

Expert Predictions & What to Watch

Key Outlook: Cautiously Neutral

The fundamental case for Palantir remains intact. The AI platform has driven consistent commercial customer additions and total contract value growth, with U.S. commercial revenue expanding at triple-digit rates for multiple consecutive quarters. Government demand has proven resilient, providing a stable base while the commercial business scales.

Key Metrics to Watch

The forward guidance framework matters more than the Q4 result. Management's commentary on FY2026 will need to address three specific questions to maintain credibility with investors. First, can U.S. commercial growth sustain triple-digit rates as the base scales, or is deceleration inevitable? Second, what is the government revenue outlook given geopolitical dynamics and defense spending priorities? Third, at what revenue scale does the company expect to achieve sustainable free cash flow margins above 30%?