Analyst Note| Mark Cash |
We are lowering our fair value estimate for narrow-moat Palantir Technologies to $27 per share from $31. Our decrease is largely due to tempering longer-term expectations for margin expansion, although we still anticipate the company will generate strong, durable growth. We believe the shares are appreciably undervalued for long-term investors. In our view, Palantir's software is mission-critical to some of the world's largest institutions, and the company is making significant strides landing new commercial clients of all sizes with prebuilt modules and consumption-based pricing alleviating up-front cost concerns.