Palantir Simply Isn't a Palatable Stock Even After Its Big Decline

In the 15 months since $Palantir(PLTR.US)$ listed on the New York Stock Exchange, fully diluted shares have increased from 2.17 billion to 2.324 billion, a rise of 7%, as stock-based compensation significantly added to shares outstanding.

Even after the recent stock decline, down 40% this year, Palantir still carries a premium multiple, trading at 12x 2023 sales. The software company plans to increase its sales force, potentially further lowering margins after a disappointing quarter.

Palantir's strategic investments, meant to increase non-government revenue, are a questionable and costly experiment. The stock lacks valuation support while business momentum slows, leaving room for Palantir's shares to fall further. Investors would be wise to stay on the sidelines.