Palantir Shares Sink After Disappointing Outlook; FVE Down to $13

We are lowering our fair value estimate for narrow-moat Palantir Technologies to $13 per share from $16. Our decrease is largely due to continued near-term macroeconomic headwinds resulting in less software spending, uncertainty in some of its larger contracts, and a disappointing outlook for the full year. Shares were hit extremely hard upon the release, down over 12% to slightly under $10 per share. Despite our more conservative estimate, Palantir remains undervalued, in our view, and our strong belief in its long-term growth potential is unchanged. We are also encouraged by Palantir’s continued effort to diversify its revenue streams, particularly within its commercial business to help mitigate lulls in revenue derived from contract timing.